Provincial governor negotiates 500,000-tonne-a-year

contract with Singaporean traders, prompting scepticism

Photo by: Tracey Shelton

Banteay Meanchey Governor Ung Oeun says he hopes to cooperate with hundreds of rice millers to complete the proposed deal.

SINGAPOREAN rice traders have discussed a deal with Banteay Meanchey provincial authorities requesting to purchase 500,000 tonnes of milled and unmilled rice per year to sell to the Philippines, Governor Ung Oeun told the Post Tuesday, despite scepticism that the deal could fall through.

Discussions on the proposal - which would represent 25 percent of Cambodia's total rice exports for 2008 - took place on Thursday, the governor said.

"I promised them [the Singaporeans] that I can offer 500,000 tonnes of rice to sell every year," he said, adding that this year his province registered a 270,000-tonne surplus for export.

The governor said that he would make up any shortfall by sourcing rice from Battambang province.

"We just finished our discussions on exporting rice, and now we are working out the price and means of transport - they [the Singaporeans] have offered to buy a number of different strains of rice," said Ung Oeun, refusing to name the traders in question.

The Kingdom produced 7 million tonnes of rice last year, exporting the surplus 2 million tonnes, meaning that the Banteay Meanchey deal - if realised - would account for more than 7 percent of Cambodia's total annual rice production.

Ung Oeun said he was working hard to cooperate with more than 200 private rice millers and 20 state millers to procure rice from farmers.

"I am trying my best to ... negotiate setting the price with them," said Ung Oeun. "They have the market but they cannot increase prices when we buy from them."

The governor said he hoped to gain permission from the Ministry of Commerce ahead of concluding an export agreement by the end of the year.

I would be happy ... However, I have never seen such an export deal materialise.

Another Banteay Meanchey official said he had seen numerous similar deals collapse.

"I would be happy if they could export rice from my province," said President of Banteay Meanchey Chamber of Commerce Ly Uttny. "However, I have never seen such an export deal materialise."

Mao Thora, secretary of state at the Ministry of Commerce, said rice exports had suffered from poor quality - Cambodia has a lack of milling and drying machines, meaning grains are too often broken - and more competitive prices from neighbouring countries, particularly Vietnam and Thailand, among the world's largest exporters of the crop.

"If we could sell large amounts of rice to them [the Singaporeans] that would be good because the ministry is trying hard to find a market for agricultural exports," said Mao Thora. "But we need to give the buyers a fair price."

Grade-1 milled rice prices have dropped 1.6 percent this year to an average of 2,460 riels (US$0.59) per kilogram on Phnom Penh markets Tuesday. Unmilled rice has climbed 8 percent in the same period to 1,080 riels per kilo.