In the first seven months of 2023, Cambodia’s paddy and rice exports to international markets had increased significantly, with the volume of paddy exports rising by more than 28 per cent and that of milled rice by nearly 4 per cent over the same period last year.
Although progress appears positive, the Cambodia Rice Federation (CRF) – the Kingdom’s apex rice industry body – said there may be challenges ahead.
According to the CRF’s report, the past seven months saw Cambodia export 362,708 tonnes of milled rice through 52 companies to 52 countries and territories, with mainland China and Hong Kong accounting for 141,950 tonnes to the tune of $90.27 million.
The increase in paddy and rice exports was largely due to an increase in production made possible by improved irrigation systems. Farmers in some areas are now able to harvest up to three times a year, while those in newly designated zones 2 and 3 around the Tonle Sap Lake can harvest twice a year, it said.
Despite the positive progress of rice exports, the CRF said there will be challenges ahead, as July is the month when most millers try to release old paddy stock to prepare for the new non-seasonal paddy, which will be harvested from late July to September.
“The current situation is that the paddy harvest is small and not yet ripening at the same time, making the price of paddy higher than expected. As a result, a large number of millers cannot buy an appropriate quantity of paddy and begin grinding it, leading to a shortage of milled rice and by-products for milling to supply the domestic market and other industries,” explained the report.
Apart from this, the problem of international milled rice markets, especially fragrant milled rice, is that the price varies from 5 to 10 per cent, whereas the price of non-seasonal paddy at harvest is between 15 per cent and 25 per cent, which makes it difficult for millers and exporters to prepare sales contracts with importers.
“These factors mean most millers are reluctant to increase paddy procurement,” said the CRF.
In view of these challenges, the federation has requested that the government and relevant institutions apply mechanisms that will support businesspeople in this field. Provided that millers have access to sufficient capital, they will be able to buy, grind and supply local markets without any problems.
Ministry of Agriculture, Forestry and Fisheries spokeswoman Im Rachna said on August 9 that in response to requests and proposals, the ministry is working closely with the CRF and other stakeholders to ensure the price of paddy remains stable.
“The ministry is examining strategies that will ensure that despite slight rises – in line with market trends – paddy prices remain acceptable. We aim to make sure that mill owners will have the capital to buy paddy from farmers during the harvesting season,” she said.
“We also want to ensure that the paddy that has been harvested can be sold at a reasonable price, avoiding the price drops that we have seen in the past,” she added.