Logo of Phnom Penh Post newspaper Phnom Penh Post - More competition from Thai millers

More competition from Thai millers

More competition from Thai millers

110803_7
A woman working in a rice field on the outskirts of Phnom Penh, in the village of Tomnom Kobsrov.

Thai government proposals to pay above market prices to rice farmers could complicate Cambodia’s goal of becoming a major milled rice exporter, according to industry insiders.

Pheu Thai party leader Yingluck Shinawatra has announced plans to buy rough rice for a guaranteed price of 15,000 baht (US$505) a tonne, more than 50 percent above current rates.

The price hike could send Thai rice millers and exporters looking into neighbouring countries such as Cambodia for paddy to process and export, say Cambodian millers.

“When Thailand purchases a lot of rice from Cambodia, there will be price competition,” said Chan Vuthy, general manager of Phnom Penh’s Golden Rice Company.

“It will affect the policies of the Kingdom’s rice-export project when there is too much rice flowing into Thailand.”

Cambodia has targeted exports of 1 million tonnes of processed rice by 2015. Ministry of Commerce statistics show the Kingdom exported 80,442 tonnes in the first half of this year.

Prices for Thai rice exports climbed more than 8 percent during July in anticipation of the new policy.

Thai Rice Exporters Association Vice President Charoen Laothamatas said if Thai exporters cannot buy expensive rice to mill for export, they may opt for cheaper rice from countries such as Vietnam, Cambodia and Burma.

“With the ASEAN free-trade agreement, such an alternative would be possible,” he said.

Cambodia’s millers say they worry about being out-competed by Thai millers looking for paddy to process.

Battambang Province Rice Millers Association President Ngi Lyheng said that area merchants often export paddy to Thailand to be processed and shipped abroad, often competing with the province’s millers.

“If there’s a high demand for rice from Thailand and that causes prices to go up, we will have to take into consideration how much we purchase because our spending capital will remain the same,” he said.

Chan Vuthy said Cambodia faces several challenges when competing with Thai rice producers, such as storage capacity. However, he noted there was strong government support in Cambodia to develop a larger rice export industry.

Ministry of Commerce Secretary of State Chan Nora said there were presently about 10 international-quality rice mills in the Kingdom, though the government worked to increase the number.

ADDITIONAL REPORTING BLOOMBERG AND BANGKOK POST

MOST VIEWED

  • Two luxury hotels latest quarantine options for inbound travellers

    The Inter-Ministerial Committee to Combat Covid-19 has designated two luxury hotels as alternative quarantine options for travellers who wish to enter Cambodia through Phnom Penh International Airport – Sokha Phnom Penh Hotel & Residence and the Courtyard by Marriott Phnom Penh. In a notice detailing guidelines issued

  • Visa A holders get to quarantine at Himawari Hotel

    The Ministry of Health has permitted foreign diplomats, UN and International NGO officials to undergo quarantine at Himawari Hotel in the capital in case they do not have a separate place suitable for this purpose, but the government would not be responsible for the expenses.

  • Baby saved as mother is lost to Covid

    Newborn baby Neth David has had a rough start in the world. His mother, Vong Daneth, was seven months pregnant when she contracted a severe case of Covid-19. When it became clear to her doctors that she would not survive, they performed a cesarean section

  • Jabs for kids bring hope for school reopenings

    Cambodia is tentatively planning to reopen schools – at least at the secondary level – when the vaccination of children aged 12-17 is completed, even though daily transmissions and deaths in other age groups remain high. Schools across the country have been suspended since March 20, one month

  • Governor: Covid subsides in capital

    Phnom Penh municipal governor Khuong Sreng said the Covid-19 situation in the capital’s 14 districts has eased, with only two districts still recording a high number of infections. “Transmission cases in all districts are dropping, though they are relatively higher Meanchey and Por Sen Chey.

  • Hun Sen: Get 12-17 age group ready for Covid jabs

    Prime Minister Hun Sen has told parents of children aged 12-17 in Phnom Penh and the provinces of Kandal and Preah Sihanouk to get them ready for vaccinations soon. “There is a need to vaccinate children and youths aged 12 to 17. According to the statistics provided