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Rice exports to Thailand dive

Workers load a bag of rice onto a trailer to be transported to a local milling factory
Workers load a bag of rice onto a trailer to be transported to a local milling factory in Battambang’s Kors Kralor district in January. Heng Chivoan

Rice exports to Thailand dive

Rice exports to Thailand plummeted in the first four months of the year as a result of that country’s surplus, which reached record levels at the end of 2013.

Between January and April, Cambodia exported just 1,550 tonnes of rice to Thailand, down 89 per cent from the 14,250 tonnes shipped in the same period last year, according to the Ministry of Agriculture’s monthly reports.

Hun Lak, president of rice export firm Mekong Oryza Trade, said the decline was due to Thailand’s rice stockpiles, which were accumulated under a state purchasing program launched in 2011 and scrapped at the end of last year.

Thailand accumulated rice stockpiles of reportedly more than 12.8 million tonnes at the end of 2013, equal to about a third of the global export market.

“The overstock of rice in Thailand reduced the demand from Thai traders for Cambodian rice,” Lak said.

“Also, rice prices in Thailand are declining as a result, meaning buyers simply cannot make a profit by importing Cambodian rice,” he added.

Thai rice prices sunk from $1,100 per tonne to $950 per tonne in February as the state-run rice pledging scheme came to an end and the Thai government began selling off its stockpiles. Consequently, Cambodian exporters reduced their prices from $950 to $880 per tonne to compete.

Lim Bunheng, president of Loran Company, said Cambodian farmers depend on Thailand and Vietnam for exports largely due to a lack of local facilities to polish and clean rice – the final stage before the product is fit for international standards.

“I hope the situation will get better after June – when more of Thailand’s stockpiled rice is sold off – because it is having an impact on our industry now both in terms export volume and price,” he said.

Sok Puthyvuth, president of the Cambodia Rice Federation, called on rice exporters to seek other markets rather than “sitting and waiting” for the situation to get better.

“We should take this chance to start to diversify markets to potential countries like China, Indonesia as well as countries in the EU for our rice while waiting for Thailand to settle things,” he said.

Thailand imported 23,550 tonnes of Cambodian rice in 2013, making it the Kingdom’s sixth largest destination for rice exports.