Large stockpiles of rice are left in limbo and may be sold for losses following decreases in commodity prices, with millers blaming a government export ban

Photo by:

Tracey Shelton

Rice for sale in Phnom Penh. The rice market in Cambodia has turned from shortage to glut, with thousands of tonnes left unsold.

OFFICIALS  in Battambang and Banteay Meanchey provinces said Wednesday that declining rice prices and the arrival of a new harvest season have left thousands of tonnes of rice sitting idle in storage mills. If the rice is not sold soon, it may deteriorate and have to be sold at fire-sale prices, millers warn.

"More than 20,000 tonnes of husk rice are still being stored in Banteay Meanchey and Battambang provinces because prices have dropped since earlier this month," said Song Hong, president of Battambang's Rice Millers Association.

"They couldn't sell it earlier, when the price was higher. Now, prices have dropped and the [new] harvest is arriving," he added.

Some millers have blamed the government for restricting rice exports and creating a backlog of rice stores.

Prime Minister Hun Sen on March 26 slapped a two-month ban on all rice exports - particularly to neighbouring Thailand and Vietnam - in an effort to slow rising domestic prices.

While the ban was lifted in May, rice stockpiled during the period continues to sit unsold.

The price of milled rice hit US$585 per tonne in October, Song Hong said, but has since dropped to $450, leaving mills unable to offload excess stores at a profit. "They can't sell them at a good price on the international market because the value has dropped there as well, and there is not as much demand," he said.

"They are now trying to sell in small parcels to businessmen who want to export to Vietnam," he said.

Heng Bunhor, director of Banteay Meanchey's provincial Agriculture Department, said the stockpiles are unusual for this time of year. "Millers have usually sold all their rice before November, when the new harvest comes and prices drop," he said.

Government ban

The March temporary ban was imposed "to guarantee food security for Cambodia", Hun Sen said at the time as prices rose amid fears of shortages.

A rice miller in Battambang who requested anonymity blamed government interference for the overstocks.

"We are not happy with the drop in rice prices," the miller said. "It is the government's fault ... for banning rice sales overseas when prices were good. We are businessmen. We do not care about politics. By the time we were allowed to export, prices were down."

Tes Ethda, president of the National Rice Millers Association, said he understood the need to sell at higher prices, but denied that the government was to blame.

"They can't blame the government for banning exports overseas. Every country has the right to do this in order to maintain food security and national stability," he said.