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Thais study rice potential

A delegation from Thailand’s Chamber of Commerce had visited Cambodia this week eyeing investment in the domestic rice industry, government officials said.

Thai rice traders have shown increased interest in Cambodia following announced changes to Thailand’s rice policies, which are set to make rice more expensive in that country.

The delegates had invest-igated the possibilities of sourcing rice as well as sett-ing up processing facilities in Cambodia, Banteay Meanchey province Chamber of Commerce deputy director Chhan Mang Heng said.

“They studied Cambodia’s potential to produce and grow rice, but need to wait for confirmation from the new government before investments can go ahead,” he said.

The new Thai policy, set for implementation in Novem-ber, will allow rice farmers to mortgage their harvest at 15,000 baht (US$500) a tonne for white rice and 20,000 baht for fragrant rice.

This could potentially make Thai rice too expensive to process for export, leading to increased investment in Cambodia and neighbouring countries, Thai Rice Exporters Association vice-president Charoen Laothamatas said.

“If Thai exporters can’t buy such expensive rice for export, they may opt for much cheaper rice from Vietnam, Cambodia or Burma, as they must maintain their market base and customers,” he said.

“Under the ASEAN free-trade agreement, such an alternative would be possible.”

Cambodian government officials have welcomed the prospect of additional investment in the agricultural sector. “If Thai companies invest in producing and processing rice in Cambodia, they will bring capital along with their techniques and experience,” Ministry of Commerce Secretary of State Chan Nora said.

He added that investments could potentially increase rice production and milled rice export in the Kingdom.

“While some Thai companies currently operate within the agriculture industry, no [Thai] firms are involves in processing and producing rice in the country,” according to Ministry of Agriculture, Forestry and Fisheries Secretary of State Chan Tong Iv.

Experts, however, have previously expressed concern that the new Thai policy could complicate Cambodia’s goal of becoming an exporter of one million tonnes of milled rice by 2015.

“When Thailand purchases a lot of rice from Cambodia, there will be price competition,” said Chan Vuthy, general manager of Phnom Penh’s Golden Rice Company, earlier this month.

“It will affect the policies of the Kingdom’s rice-export project when there is too much rice flowing into Thailand.”

In the first six months of 2011, Cambodian rice exports more than quadrupled to 80,442 tonnes, worth $45.7 million, compared with the same period last year, according to Ministry of Commerce statistics.
Thailand exported 6.3 mill-ion tonnes in the first half, a 58 per cent year-on-year growth.

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