State-owned Rural Development Bank (RDB) projected that the demand for loans in the rice sector will increase this season, said CEO Kao Thach on Monday.
He said while more rice facilities are ready for operation this year, there will be more demand for loans.
RDB disbursed $35 million to approximately 40 rice millers and exporters last year, out of the $50 million earmarked for loans.
The government’s decision to disburse loans directly through RDB sidestepped the Cambodian Rice Federation (CRF), the industry body that has lobbied the government since March 2016 to provide emergency funds for its members.
In September 2016, the government transferred its share of a $27 million package to RDB so the bank could disburse loans to millers, allowing them to purchase paddy from farmers.
In August, another $23 million was injected by the government, bringing the total to $50 million aimed at propping up the struggling industry.
Thach said a new loan will be issued for the rice industry at the end of July and he expects it to be in high demand.
“The demand for capital in the coming season would see a huge increase as rice facilities are ready for storage and milling,” he said, adding that the total storage capacity this season would be around 450,000 tonnes on the strength of four facilities launched earlier this month.
“Even if the loan package comes up short, we will request the government to add more money,” Thach said.
AMRU Rice Co Ltd CEO Song Saran said while rice cultivation has kept growing along with buyer demand, the industry needed to supply 350,000 tonnes to the international market in the coming season.
“Now that we are less concerned about storage and milling, we need at least $50 million in hand for the rice industry to supply the needs of the international market,” he said.