Logo of Phnom Penh Post newspaper Phnom Penh Post - Ban on rice exports no cure all

Ban on rice exports no cure all

Ban on rice exports no cure all

z5-rice-use.jpg
z5-rice-use.jpg

TANG CHHIN SOTHY/ AFP

People buy discount rice that had been released from government stockpiles, in Phnom Penh on March 27

As fears about rising food prices continue to mount, the two-month ban on rice exports announced by the government last week seemed unlikely to have much effect, analysts and politicians said.

Rice vendors on Street 108 in Phnom Penh said the retail price of rice rose from 1,700-2,500 riel per kilogram three months ago to 2,400-3,600 riel in early April as a result of local rice shortages.

The government on March 26 announced a two-month ban on rice exports and state-owned agricultural firm Green Trade flooded the market with cheap surplus grain to alleviate rising costs.

“To ensure food security for Cambodia, Cambodia will stop exporting for two months,” Prime Minister Hun Sen said during a speech in Pailin. “After two months we will reconsider and look at the rice market’s security.”

Five kilograms of cheap Green Trade rice were made available to each buyer in late March.

The ban came after Egypt, a major global rice supplier, announced a six-month halt of rice exports. Vietnam also announced it will limit its 2008 exports to 3.5 million tons – down from an expected total of five million tons.

Opposition members, meanwhile, criticized Cambodia’s export ban, pointing to the government’s poor record of combating inflation. “It shows very poor planning from the government,” said Mu Sochua, deputy secretary-general of the Sam Rainsy Party.

“If they had done any sort of projections, they would have detected these soaring prices way ahead of time.

“[A ban] is a good thing only if it is part of a plan,” she said. “But it’s way too late. I don’t think there are enough [rice] stocks to maintain the price. That is why the government can only make the promise for two months.”

Kang Chandararot, from the Cambodia Institute of Development Study, said the export ban made sense in theory, but might be difficult to implement.

“How many border crossings do we have with other countries? And how much domestic pressure is there to continue exports? I am skeptical it will be a real success,” he said.

One leading agricultural analyst, who declined to be named, said rice prices are set in a regional economic context. The analyst noted that Vietnam’s price controls have prompted wholesalers there to search out more affordable rice in Cambodia, driving up the price of paddy here.

While Cambodia produces a large surplus of milled rice – some 1.4 million tons in 2007, according to the Ministry of Agriculture, Forestry & Fisheries – the lack of suitable storage facilities is forcing farmers to export excess unhusked paddy, often illegally.

“Many Vietnamese merchants come to Cambodia to buy paddy rice,” said Mu Sochua.

“There is an official trade, but mainly it is unofficial.”

Yang Saing Kuma, president of the Cambodian Centre for Study and Development in Agriculture, said government actions have contributed to price stability but added that he was unsure how long it would last.

“The prices are not going up anymore,” he said. “But how long it will continue like this is a big question… You cannot enforce [a total ban] on cross-border trade.”

Kuma said Cambodia needs a long-term plan to build up emergency food supplies.

“What the government should do is provide more soft loans to rice millers to buy rice from farmers during the harvest season, at the same price offered by [foreign] traders,” he said. “If the government has enough rice stocks then we can ensure some stability in the price.”

MOST VIEWED

  • New US bill ‘is a violation of Cambodian independence’

    After a US congressmen introduced bipartisan legislation that will enact sanctions on Cambodian officials responsible for “undermining democracy” in the Kingdom, government officials and the ruling Cambodian People’s Party on Sunday said they regarded the potential action as the “violation of independence and sovereignty

  • Angkor Wat named as the top landmark for the second year

    Travel website TripAdvisor has named Cambodia’s ancient wonder Angkor Wat as the top landmark in the world for the second year running in their Travelers’ Choice Award 2018, an achievement Cambodian tourism operators expect will attract more tourists to the Kingdom. The website uses traveller

  • Ministry’s plan for net sparks fears

    The government has ordered all domestic and international internet traffic in the Kingdom to pass through a Data Management Centre (DMC) that has been newly created by the state-owned Telecom Cambodia, in a move some have claimed is an attempt to censor government critics. Spokesman

  • Hun Sen detractors ‘will die’

    Prime Minister Hun Sen on Wednesday said those who curse or insult him would eventually die without a plot of land to bury their bodies after being killed by lightning, suffering the same fate as those who recently died in Thmar Baing district in Koh