The government, local millers say rising sales of high-quality grain to Vietnamese traders balances the lack of larger export markets
WITH this year's harvest in, traders report surging sales of high-grade rice to Vietnam where it is popular on the domestic market, experts say, adding that the trend is working in Cambodia's favour.
"It is good that farmers can sell at a high price to the Vietnamese because we don't have enough credit to buy rice from farmers and we also don't have a proper [local] market," Tes Ethda, president of the National Rice Millers Association of Cambodia, told the Post Monday.
According to Tes Ethda, this strong foreign demand has helped mitigate the impact of falling rice prices for farmers without driving up the price of the staple grain on the local market.
Tes Ethda added that Vietnamese traders only buy premium-grade rice - usually in an unprocessed form - while local demand is generally satisfied by poorer quality grains.
Cambodia is expecting a 2.81 million tonne raw rice surplus, which can be processed into 1.8 million tonnes of milled rice, at the end of this year's harvest season, according to a recent government report.
Suor Khieng, vice president of the Rice Millers Association of Kampong Cham, which represents about 30 rice millers, said local mills don't have enough money to buy up the Kingdom's premium-grade rice.
"We [millers] can buy only small amounts of rice for processing because we don't have drying machines," Suor Khieng said, adding that the mills also offer lower prices than the Vietnamese traders.
"Our association reserves about 50,000 tonnes of milled rice after the close of the harvest season," he said.
Suor Khieng said that without purchases from Vietnam, the rice sector would suffer because Cambodia does not yet have a developed domestic market.
"The Vietnamese want to eat Cambodian rice because it is good and more hygienic than their locally-produced rice," he said.
Song Hong, vice president of the Cambodian Rice Millers Association in Battambang, said the Vietnamese have been arriving in the province to purchase high-quality jasmine, phkar malis and phkar romdoul rice since November.
"We and the Vietnamese traders offer similar prices to farmers, but we are able to buy only small amounts of rice due to capital constraints and a lack of proper technology," Song Hong said. "No capital, no competition."
The Vietnamese buy wet rice from farmers, while local millers buy only dry rice because they don't have drying machines, he added.
"Hundreds of trucks containing premium rice are being driven to the Cambodian-Vietnamese border every day," Song Hong said.
He said the his milling association has about 20 local millers that produce rice for local demand, as well as for possible overseas exports.
"We have to wait and see whether we can find a proper export market for our rice," Mao Thora, a secretary of state at the Ministry of Commerce, told the Post Monday.
He added that the government would be prepared to ban all rice exports in the event of shortages at home.
A ban on rice exports was imposed from March through May this year to ensure sufficient stocks for local demand.