The Kingdom’s rice exports saw a 1.5 per cent drop last year compared to 2017 due to the industry’s lingering challenges – the cost of production and competition with the international market.
Ministry of Agriculture, Forestry and Fisheries figures show that the country exported 626,225 tonnes of rice last year, decreasing 1.5 per cent from 635,679 tonnes in 2017.
According to the figures, the main destinations for rice exports were the EU with a total of 269,127 tonnes and China with 170,154 tonnes.
Ministry spokesman Srey Vuthy said high production costs hindered competition with an international market.
“Despite rice facilities already being developed for the rice industry, our rice exports are still decreasing.”
Phou Puy, CEO of Thaneakea Srov (Kampuchea) Plc, one of the Kingdom’s major rice exporters, which is headquartered in Battambang province, noted that while his company continues to see an increase in rice exports, the Kingdom’s exports show an overall decrease.
He said the decrease is due to limited paddy buying capacity, as rice millers and exporters face stiff competition for the price of their paddy from brokers of neighbouring countries.
“A major challenge for the industry is a shortage of capital – rice millers will not dare buy paddy at a higher rate and compete with neighbouring countries."
“Even though we have [launched] some rice storage and drying [facilities], there is no paddy in stock and this impacts rice exports,” he said.
With more rice facilities constantly being installed, the price of paddy for the 2018-2019 season stands between 900 riel and 1,300 riel ($0.22 and $0.32) per kg – a better price for farmers compared to the previous season, according to industry insiders.
Vuthy said that it is hard to envision what lies in store for rice exports this year.
“There are many factors of the challenges needed to be discussed and they need time to solve – including logistic and electricity costs, which add to production costs and impede competition with the international market,” he said.
Cambodia Rice Federation vice-president Vong Bun Heng said fear of the EU implementing a safeguard, which will allow EU member states to impose barriers to protect against trade imbalances, is the main contributor to rice export slowdown.
“Some international buyers hesitate to place orders when they hear about [a possible] implementation of the EU safeguard. There is a need for our rice, but the choice of buyers is limited,” he said.
Centre for Policy Studies director Chan Sophal said the Kingdom’s rice industry may eventually find itself in a critical condition.
“I think the export of milled rice from Cambodia will be very difficult, due to a lack of competition in the post-harvest sector, especially if it is subject to tariffs imposed by the EU. Farmers will have to rely on paddy rice buyers from neighbouring countries,” he said.