Private sector says milled rice exports could increase dramatically in 2009, despite goverment ruling that stockpiles grow to 500,000 tonnes

Photo by: Tracey Shelton

A rice vendor in Phnom Penh. Cambodia’s private rice exporters expect strong growth for 2009.

CAMBODIA may see a 10-fold increase in private-sector milled rice exports this year - up to 200,000 tonnes from 20,000 in 2008 - with the industry citing greater milling capacity and and new export markets for the dramatic increase.

The Federation of Cambodian Rice Miller Associations (FCRMA), which is responsible for all private rice exports, told the Post that the increase would come despite higher government stock requirements.

The private sector is required to maintain minimum stocks of 500,000 tonnes in 2009, up from 400,000 last year.

About 300,000 tonnes have already been collected from the latest harvest, with the remainder to be purchased soon, said Phou Puy, FCRMA president.

To offset the effects of the stockpiling rule, the industry was offered US$12 million in low-interest loans with a further $3 million from the Rural Development Bank, he said.

The capital is being used to increase the capacity and quality of milling, by upgrading infrastructure, and to buy paddy from farmers, Phou Puy added.

Rice traders hope that the investment will improve the quality of Cambodian milled rice and boost high-value exports through increased demand. Traditionally, Cambodia has almost exclusively exported unprocessed paddy.

"Last year, we exported 20,000 tonnes of milled rice to Malaysia, Germany and Brunei as part of a pilot scheme. We also exported about 500,000 tonnes of rice paddy," Phou Puy said.

Targeting export markets

The industry has expanded export markets, with 200,000 tonnes earmarked for Germany, Malaysia, Brunei, and Saudi Arabia, Phou Puy said.

Association members are paying farmers $200 per tonne compared with $185 last year, a move that Fang Vun, president of the Rice Millers Association of Bantay Meanchey province, says is designed to prevent rice growers from selling on the black market.

At the end of March last year, Prime Minister Hun Sen banned exports for two months in a bid to curb rising rice prices.

The ban caused an outcry among traders at a time when the industry hoped to capitalise on high food prices.

Mao Thora, secretary of state of the Ministry of Commerce, said last week that the association has enough rice to export, despite the stockpiling requirement.

Cambodia typically exports one million tonnes of rice per year, most of which is paddy.

Government figures say that Cambodia produced a two-million-tonne rice surplus in 2008, with more than eight million tonnes production expected for this year.