Logo of Phnom Penh Post newspaper Phnom Penh Post - Manila rice demand highlights challenges

Manila rice demand highlights challenges

Manila rice demand highlights challenges

THE Philippines’ National Food Authority aims to begin importing Cambodian rice “at the very latest next year”, though experts say the  domestic rice industry must overcome hurdles as it aims to become a major exporter of the staple crop.

NFA officials met with Cambodian counterparts earlier this month on a fact-finding mission, aiming to sign an updated Memorandum of Understanding for rice shipments to the Philippines, according to NFA Chief of Staff Gilbert Lauengco.

Thailand and Vietnam – the world’s largest and second-largest exporters of rice, according to the Food and Agriculture Organisation – currently supply much of the Philippines’ needs, he said, but added, “We are studying the possibility of Cambodia as an alternate source [of imports].”

Last month, Reuters news service claimed the Philippines planned to import 1.3 million tonnes this year. But experts say Cambodia faces key challenges to tap this demand, particularly in competing with its established neighbours.

Cambodian Centre for Study and Development in Agriculture President Yang Saing Koma said the Philippines generally imports from Thailand or Vietnam, based on prices.

“Cambodia needs to compete with Vietnam and Thailand in terms of price and quality,” he said.

Several countries are interested in Cambodia’s rice – including the Philippines as well as China, Bangladesh and nations in the Middle East and Africa – but productivity needs to be increased to meet this demand.

Gordon Peters, Senior Consultant at Emerging Markets Consulting, said the Philippines was a major importer, accounting for 8 percent of the world’s total last year.

“A strategic relationship with the Philippines as a Cambodian rice buyer is a great sign for Cambodia’s long-term rice export plans,” he said.

“There’s an opportunity to create a Cambodian brand since one of the major buyers is looking at the Cambodian product,” he said. “This can be leveraged into other markets as Cambodia begins to see results from its national rice strategy and increases in yields and export-quality rice.”

However, Cambodia’s rice production was more costly than its neighbours due to excessive electricity costs, as well as a somewhat higher cost of doing business. “This includes infrastructure and logistics, and soft costs such as time spent waiting at the border,” said Peters.

Prime Minister Hun Sen has made increasing rice exports an administration priority, targeting exports of 1 million tonnes of milled rice by 2015.

Phou Poy, President of the Cambodian Rice Millers Association, said the Philippines indicated its interest in buying its rice, but had not yet specified a time frame. Manila would aim to import hundreds of thousands of tonnes from Cambodia, beyond the Kingdom’s current milling capacity, he said.

“They may be reluctant to buy from us, and seek to buy from other countries that can supply rice in large amounts,” said Phou Poy.

Gilbert Lauengco said milling capacity could be improved in Cambodia, though it could at present provide “certain amounts” to the NFA. He declined to reveal the amounts the authority requested from Cambodia. “We can’t give an actual number – it’s based on the shortfall,” he said.

The National Food Authority was also considering providing milling facilities to the Kingdom. It aimed to sign an updated Memorandum of Understanding with either the Ministry of Commerce or the Ministry of Agriculture, Forestry and Fisheries – after having talks with both, he said.

The Philippines had been overtaken by Indonesia as the world’s largest rice importer by volumes, he claimed, but added that even as Manila aimed to improve domestic production of rice, it would likely need to continue imports for at least three years.

ADDITIONAL REPORTING SIEAM BUNTHY

MOST VIEWED

  • PM: West unfair to Cambodia

    Prime Minister Hun Sen released a message celebrating the International Day of Peace on Monday, saying that some major powers and western countries had been systemically cooperating to put political pressure on Cambodia as they did in the 1970s and 1980s. Hun Sen said pressuring

  • First ‘mobile kitchen’ in Cambodia enters service

    A catering company recently rolled out Cambodia’s first “mobile kitchen” – a $50,000 container capable of serving up to 200 people at a time. The kitchen is the brainchild of Seng Hok Heng Catering Services. At 4.4m-high, 6.8m-long and 2.4m-wide (expandable to 6.8m), the kitchen is equipped

  • Kingdom, China rebut basis for US sanctions

    The Council for the Development of Cambodia, the Ministry of Foreign Affairs and International Cooperation, and Tianjin Union Investment Development Group Co Ltd (Tianjin) have responded to US sanctions on Union Development Group Co Ltd (UDG), a Chinese-owned company currently developing the sprawling $3.8 billion Dara

  • Influenza breaks out in eight provinces

    Nearly 600 people have been infected with influenza in eight provinces in the past month, Ministry of Health spokesperson Or Vandine said. The ministry is advising extreme caution. A report released by Vandine on Saturday said the Ministry of Health observed transmissions of influenza between August 15

  • CNRP activist freed; Sam Rainsy pledges return to Kingdom

    The Phnom Penh Municipal Court on Monday released former CNRP activist Oeur Narith on bail after the court ended its questioning on suspicion of receiving money from abroad and plotting to overthrow the government, according to the authorities. National Police spokesman Chhay Kim Khoeun confirmed

  • Hun Sen says developing nations ‘targets of rivalry’

    Prime Minister Hun Sen spoke at the virtual UN General Assembly on Monday, saying that developing nations often become targets of punishment for their imperfections when they don’t rise to the standards of developed countries. He said rivalries between superpowers often hamper developing countries’