State-owned agriculture company Green Trade said yesterday that it will not participate in the latest Philippine government’s rice auction as Cambodia’s rice cannot compete on price with neighbouring Thailand and Vietnam.
The Philippines’ National Food Authority (NFA) yesterday authorised the import of 750,000 tonnes of rice and has invited the governments of Cambodia, Thailand and Vietnam to join the bidding process to fill the quota, according to a report from Reuters.
But having already lost out twice in the past 12 months, Heang Vutha, director general of Green Trade, said the new tender, which has set a closing date on bids of September 17, is too soon to expect costs to have come down to the point where Cambodia can compete.
“Our cost of rice is still higher than other countries so we will consider joining the next bid when we can lower the cost of rice,” Vuthea said, referring to a potential future Philippine’s offer beyond this month.
In its most recent effort, Cambodia lost out on a 100,000-tonne Philippines’ rice bid to Vietnam in June.
Vietnam’s, $417 per tonne, was only marginally smaller than Thailand’s, but Cambodia’s final bid of $455.50 per tonne was way above the reference price of $408.15 Higher transportation and electricity costs lead the list of factors that have prohibited Cambodia from bidding competitively, according to Vutha.
“We are on the process of discussing which sectors we can cut cost that would lower the cost of rice as a result,” he said.
However, Song Saran, CEO of Amru Rice Company, said that Cambodia could still be competitive in the bidding process if the government was willing to share in some loses and offer incentives to private exporters, through tax cuts, low-interest loans, lower electricity fees or transportation cost reduction.
“It is a good opportunity for Cambodia to open the market there again, to show about our quality rice” he said.
“We want to get the new experience for Filipino clients as well.”
Moul Sarith, acting secretary general of Cambodia Rice Federation said that Cambodia has the quality to compete, but would still run at a loss if it were to drop its prices to below that of Vietnam, due to the higher costs of production and exports.
“NFA needs good quality rice at a low price and we could not compete with the cost of rice,” he said.
Sarith said, however, his members had not yet decided if they would push for a bid on the latest offer from the Philippines.