Logo of Phnom Penh Post newspaper Phnom Penh Post - CRF: $200M in emergency loans needed for rice sector

CRF: $200M in emergency loans needed for rice sector

Content image - Phnom Penh Post
Cambodia Rice Federation (CRF) has asked the state-owned Rural Development Bank (RDB) to provide $200 million in emergency loans to buy paddy from farmers. Heng Chivoan

CRF: $200M in emergency loans needed for rice sector

The Cambodia Rice Federation (CRF) has asked the state-owned Rural Development Bank (RDB) to provide $200 million in emergency loans to buy paddy from farmers during the ongoing post-monsoon harvest season as falling prices threaten their livelihoods.

CRF vice-president Chan Sokheang told The Post on Tuesday that it had submitted a letter to the RDB last week proposing that it forward the letter to Minister of Economy and Finance Aun Pornmoniroth.

He said paddy exports from markets such as China and Europe, and fewer commercial bank loans to the agricultural sector have contributed to a decrease in working capital for rice millers and exporters.

The price of paddy has dropped to between 980 and 1,030 riel ($0.24 and $0.26) per kilogramme – depending on the area. However, the quality of the paddy remains high, Sokheang said.

“During this month last year, large countries in Europe and China ordered milled rice from us, but they have not placed any orders to date.

“Some commercial banks have reduced their agricultural loans by 50 per cent, and up to 60 per cent, since the EU decided to impose tariffs on rice imports from Cambodia. We need to supplement this capital shortfall,” he said.

RDB CEO Kao Thach told The Post on Tuesday that capital shortage in the rice sector is between $200 million and $250 million. To help remedy the issue, he has called on commercial banks to lend more to the sector.

“I am trying to mobilise more capital investment from other partners, and have already submitted a number of proposals to the government asking for more capital investment to help the sector,” he said.

Thach said an RDB study said rice millers and exporters have disbursed about $350 million from bank loans and direct capital to purchase paddy.

“The [sector] has been facing a capital shortfall since October, and will continue to do so until January next year because the payment for orders will not circulate on time.”

CRF secretary-general Lun Yeng told The Post last week that total capital investment in the Kingdom’s rice sector is between $300 million and $400 million.

“Normally, in the early harvest season, rice exporters and millers buy paddy for stockpiles, leaving them with a lack of funds by the end of the season,” he said.

Heng Pheng, the CEO of Thmor Korl Rice Import Export Co Ltd, a Battambang-based rice exporter, said prices in Battambang province appeared to have dropped slightly compared to the beginning of last year’s post-monsoon harvest season.

He said the price of paddy he bought from the farmers was worth around 1.17 million riel per tonne, compared to 1.28 million riel last year for the same quantity.

Watch video:

MOST VIEWED

  • School reopening to be postponed until November

    Minister of Education Hang Chuon Naron on Tuesday wrote to Prime Minister Hun Sen requesting a delay of school reopening across the Kingdom until November, when the new academic year begins. In his letter, Chuon Naron said the postponement is warranted to avoid the new

  • Foreigners in Kingdom must now register in FPCS system

    The Ministry of Interior’s General Department of Immigration (GDI) announced that it would not grant visa extensions to foreigners staying in Cambodia if their names are not listed on the Foreigners Present in Cambodia System (FPCS) by July 1. Foreign nationals can register in the

  • Covid-19 at ‘alarming rate’, health ministry says

    The Covid-19 risk level for individual transmission is at an “alarming rate” in the Kingdom and its probability is “not low”, warned Health Ministry spokesperson Or Vandine. “Cambodia’s coronavirus scenario is classified as being at an early stage of the pandemic because of ongoing

  • Mandatory quarantine for 30,000 workers begins

    Some of the roughly 30,000 workers from factories and enterprises across the Kingdom who went on leave during Khmer New Year began their government-imposed 14-day quarantine on Monday. Speaking at a press conference while visiting workers at the Phnom Penh Special Economic Zone on Monday, Ministry

  • Unemployed to get $40 per month

    The Ministry of Labour and Vocational Training has instructed enterprises, business owners and travel agencies in five provinces to prepare the proper forms for the suspension of employment contracts. This, it said, will make it easier for the ministry to transfer $40 a month to workers

  • Gov’t travel ban flouted

    While the majority of Cambodians have paid heed to Prime Minister Hun Sen’s order to stay put and not travel during the Khmer New Year – the holidays of which were also postponed – several hundred have left Phnom Penh nonetheless. They have allegedly breached provincial

  • G20 energy ministers struggle to finalise oil output cuts

    Top oil producers struggled to finalise production cuts during a virtual summit held by Group of 20 (G20) energy ministers on Friday, despite US President Donald Trump’s mediation efforts to end a standoff with Mexico. The final G20 communique appeared to gloss over simmering divisions

  • Kingdom revises travel restriction order

    The government on Friday eased the district and provincial border restrictions issued on Thursday. People are now allowed to cross districts within their provinces. Phnom Penh and Kandal province are to be treated as a single region where people are allowed to travel freely. In

  • Private schools struggling

    The Cambodian Higher Education Association has claimed that 113 private educational establishments are facing bankruptcy because of their inability to pay rent and staff salaries in light of nationwide school closures caused by the Covid-19 outbreak. It said the financial trouble started when the Ministry of

  • Khmer New Year holidays postponed

    In an effort to halt Covid-19 infections in the Kingdom, Prime Minister Hun Sen has postponed the Khmer New Year holidays scheduled from April 13 to 16. While the people will not have their usual break, nor will there be any public celebrations or gatherings at pagodas,