Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia priced out of Filipino rice tender again

Cambodia priced out of Filipino rice tender again

Cambodia priced out of Filipino rice tender again

Cambodia has lost a 100,000-tonne Filipino rice bid to Vietnam, on account of a higher costs as compared to regional competitors, marking the fourth time the Kingdom has failed to win a rice tender issued by the Philippines.

The Philippines National Food Authority last week awarded the tender to Vietnam Southern Food Corp based on its offer of $416.85 per tonne, a little higher than the reference price of $408.15 per tonne set during the tender, according to the Philippine Star.

Thailand’s offer was marginally higher than Vietnam’s, $417 per tonne, but Cambodia’s final bid of $455.50 per tonne was way above the reserve price. All three countries were asked to revise their initial bids after they were deemed too high by the Philippines.

Sok Puthyvuth, president of the Cambodia Rice Federation (CRF), said that despite being costlier than neighbouring countries, $455 a tonne left exporters with little or no profit and was the best price they could offer given the circumstances.

“The problem is our paddy rice is already expensive when collected for milling, and the cost of processing to export was higher than that in neighboring countries,” Puthyvuth said.

CRF committees, he said, are working to bring down processing and transportation costs and hoped to be more competitive during the next bid.

“We are looking at short-term solutions, like cutting down service costs in the value chain, such as port fees, and in the long term to increase efficiency in rice processing among the millers and rice productivity among the farmers,” he said.

High production prices and the poor quality of agro-inputs, such as fertilisers and insecticides, affected Cambodia’s competitiveness, said Srey Chanthy, an independent economist. He added that high energy costs and use of outdated technology at processing plants also impacted rice prices.

“There is need for a mechanism that supports, facilitates and improves the whole value chain of Cambodia’s rice sector,” he said.

But as long as Cambodia could make up for these low margins with higher profits from other high value export destinations, Chanthy said, it was worth bidding for future Filipino tenders.

The 100,000 tonne bid comes weeks after 150,000 tonnes was also procured from Vietnam on June 6 for $416.8 per tonne, taking the average cost of the entire 250,000 tonnes to $412.8, according to the Philippine Star.

Ken Ratha, spokesperson for the Ministry of Commerce, could not be reached for comment yesterday.

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