Logo of Phnom Penh Post newspaper Phnom Penh Post - Milled rice exports drop in January

Milled rice exports drop in January

Milled rice exports drop in January

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Some of Cambodia’s biggest exporters have experienced a sizeable decline in milled-rice shipments this month, with one insider putting the number as high as 40 per cent year-on-year.

Nina Loacker/Phnom Penh Post
A woman sells milled rice at a shop near Monivong and Russian Federation boulevards in Phnom Penh yesterday.

The waning figure stands in stark contrast to last year’s milled-rice export numbers, which increased about 22 per cent year-on-year in 2011, according to Ministry of Commerce data.

Prices for premium milled rice in Pakistan, India and Vietnam had fallen far below Cambodian prices this month, Mega Green Imex Cambodia managing director Outh Renne said.

That decline rendered the Kingdom uncompetitive on international markets even with the duty-free preference it enjoyed in the European Union, he said.

Cambodian rice prices have suffered wild fluctuations since the product was first exported about two years ago, according to Outh Renne.

The changes in price, which have moved by more than US$100 a tonne during the past year, had stalled long-term rice contracts, he said.

“Look how different the price is. How can we export to the international market when the price changes so greatly?”

Cambodian rice prices had changed by $20 a tonne since the beginning of Chinese New Year two days ago, Outh Renne said.

He noted steep declines in milled-rice exports in January, but could not confirm an exact percentage decrease for Mega Green.

A Cambodia-based rice expert with access to export statistics, speaking on condition of anonymity, said orders at three of the biggest mills had dropped by 40 per cent this month.

The low quality of Cambodian rice was hindering exports, the source said. When Cambodian rice prices were comparable to, or even slightly lower than, competitors’ prices, importers often opted for higher-quality grain, the source added.

Cambodia exported more than 170,000 tonnes of milled rice, worth about $104 million, in 2011, Ministry of Commerce data shows.

Exports in 2010 were 140,000 tonnes with a total value of $35.3 million, according to the data.

Government officials have hailed growing exports, along with several large memorandums of understandings with foreign importers, as part of the piecemeal climb toward the 2015 goal of exporting a million tonnes of milled rice.

The sudden decline in Cambodia’s exports was not surprising, Kalyan Mey, senior adviser to the Supreme National Economic Council, said yesterday. The lack of systematic procedures – from the rice fields to the ports – hampered reliable supply of the milled grain and caused price fluctuations, he said.

“Farmers are still independent and separate from the process. They cannot respond to the demands of the international market,” Kalyan Mey said, adding that the government encouraged stronger associat-ion among farmers and millers as a way of bringing much-needed technology and finance to the sector.

Cambodian companies signed several memorandums of understanding with importers in 2011, some for as many as 200,000 tonnes of milled rice a year, the Post reported. Many of these MoUs have yet to result in formal contracts, however.

Outh Renne pointed to about 30 Cambodian rice mills that had inked MoUs with foreign companies but  had not pushed forward with an official investment. Unreliable supply and constantly changing rice prices might be deterring investors from closing the deals, he said.

The MoUs meant little on the global market, Kalyan Mey said. Although the informal agreements were a sure sign of interest in the Cambodian market, importers would buy lower-priced grain regardless, he said.

Some insiders and officials claimed the Chinese New Year had caused  delays in shipping orders.

Loran Import-Export Company chief executive Lim Bun Heng said  exports would pick up after the holiday, which was widely celebrated across the region.

Ministry of Commerce secretary of state Chan Nora, reached yesterday by phone, agreed that Chinese New Year had temporarily delayed milled-rice exports.

But the source with access to export statistics said the majority of milled-rice exports went to the European Union, and would be unaffected by Chinese New Year.

Only paddy sales to Vietnam would be stalled by the celebration, the source said.

Cambodia does not yet export paddy or milled rice to China.

Mega Green Imex exported 37,000 tonnes of rice to the European Union alone in 2011, Outh Renne said.

The company planned to export 80,000 tonnes this year, with $21 million in contracts to Europe and the Philippines, he said.

Loran planned to export 50,000 tonnes, a 150 per cent increase on last year, Lim Bun Heng said.

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