The Thai government has plans to set up a rice trade zone in four eastern provinces in Thailand to process Cambodian rice for export, the Bangkok Post reported yesterday.

Tikhumporn Natvaratat, deputy director-general of the Thai Department of Foreign Trade, was quoted as saying: “If Thailand exports the rice to the European Union, it may benefit from the privileges under the Generalised System of Preferences that the EU offers to Cambodia because the origin of the rice is Cambodia.

"Consequently, Thailand can boost its competitiveness and benefit from by-products from rice milling including bran and broken rice that can be sold."

Thailand may initially import between 100 and 1,000 tonnes of rice from Cambodia for the export project that is planned in Chanthaburi, Trat, Sa Kaeo and Chachoengsao provinces, he said.

Among the types of rice considered to be imported from Cambodia are paddy and brown rice, according to the Bangkok Post.

Kong Putheara, director of the Ministry of Commerce statistics department, said he welcomes the plans of the new Thai strategy to potentially buy paddy from Cambodia, saying that most of the problems of the Cambodian agricultural sector stem from markets, rather than production.

“In the short term, there is no concern because it will help farmers getting more bargaining power on the price,” he said.

“If more come to buy, the price will increase so the technology and credit supply in the agricultural sector will be better.”

He also said the government does “not have enough budget to buy all the paddy” from Cambodian farmers, who therefore export much of it to neighbouring countries such as Vietnam and Thailand.

As Cambodia aims to cut down paddy exports and increase milled rice exports, Hun Lak, general director of milled-rice trading company Mekong Oryza, predicted that the open markets would translate to higher demand, which will eventually benefit the farmers.

“In my opinion, more demand will help [make] the price higher and gives farmers an incentive to increase productivity for more profits,” said Lak.

“However, we want our paddy process locally before [we] export as it provides more value-added.”

Tikhumporn did not reply to an email sent yesterday.

According to the Thai Rice Exporters Association, Thailand exported 6.9 million tonnes of milled rice in 2012, an almost 35 per cent decrease compared with 2011.

Data from the association show that between January 1 and March 8 this year, Thailand exported 835,160 tonnes of milled rice, a 0.17 per cent decrease over the same period last year.

Earlier this month, the Post reported that Cambodia exported 49,815 tonnes of milled rice in the first two months of this year, an increase of 106 per cent from the same period last year.