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Philippine rice market beckons

Philippine rice market beckons

Cambodia will send an informal trade delegation to the Philippines next month to secure deals for rice exports.

The world’s biggest importer has announced that its rice production dropped more than 10 percent in the first six months compared with last year. Sun Kunthor, vice chairman of the Supreme National Economic Council, said the Cambodian delegation would seek to leverage the Philippines’ growing demand for the staple crop.

“We will go to the Philippines soon, and we hope the Philippines will buy rice from Cambodia because the country’s rice demand is big,” he said. Sun Kunthor was among those involved in drafting the Kingdom’s new policies aimed at boosting rice production and exports.

Philippine production of the food staple has fallen 10.2 percent in the first half of the year, compared with a year earlier, Manila announced Tuesday.

Officials from the archipelago said dry weather caused by El Niño resulted in parched crops, and may require imports to make up for the fall in production.

The Philippines is considering plans to boost imports, which have already hit a record 2.47 million metric tonnes this year.

A formal decision would be made by Friday next week, said Philippines Agriculture Secretary Proceso Alcala.

Production is expected to decrease further. Bureau of Agricultural Statistics Director Romeo Recide said Tuesday that output may fall another 25.6 percent in the third quarter, a dramatic increase from the 3.7 percent slump forecast in May.

However, he said that production could rebound by 30.3 percent in the last three months of the year.

Prime Minister Hun Sen highlighted Cambodia’s plan to increasingly tap the Philippine market when he unveiled the Kingdom’s new rice policy earlier this week.

Government advisor in charge of trade promotion Sok Siphana will lead a delegation to the Philippines for “informal negotiations”, with the intent to later enter into formal discussion over shipments, he said Tuesday.

“The government is adopting policies to turn to overseas markets in order to boost rice exports because in the future, rice exports may become a key sector for the leapfrogging of Cambodia’s economic growth,” Hun Sen said Tuesday.

A source close to the prime minister, who asked not to be named, said the plan included a trade delegation expected to visit the Philippines next month.

The prime minister said informal exploration of the Philippine rice market was necessary to better understand its needs.

“We want to know what kind of rice the markets need so that we are able to provide them supply which meets their requirements,” he said.

Last month, Philippine agribusiness investment officer Pablito Villegas who took part in his country’s first trade mission to Cambodia in July, told Philippine news outlet GMA News TV that domestic buyers were looking to purchase between 200,000 and 300,000 tonnes of Cambodian rice.

According to the Kingdom’s new rice policy, the government is seeking to export at least 1 million tonnes of rice to international markets by 2015.

The news also comes as rice exports from Pakistan, the world’s third-largest exporter, are expected to fall after extensive floods damaged crops in areas accounting for 90 percent of agricultural output.

Pakistan was expected to export 3.8 million tonnes of rice this year, more than 10 percent of the estimated global shipments of 30.4 million tonnes, according to the Food and Agriculture Organisation, which made the forecast in July, before the flooding.

Sok Siphana could not be reached for comment yesterday.

Additional reporting by bloomberg


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