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Drought, exports lift rice price

Drought, exports lift rice price

The cost of milled rice in Cambodia has jumped 10 percent on last year and could

climb still further, said the head of the Rice Millers' Association (RMA).

The price of unmilled rice, or paddy, has also risen, he said.

Among the reasons were a shortfall in last year's crop due to both flooding and drought,

and increased exports to Vietnam.

"This year's prices are definitely higher," said Phou Puy, president of

the RMA. "Last year I was selling milled rice at $160 per ton. This year that

has climbed to $180."

Puy said that 80 percent of paddy rice grown in the country's eastern provinces was

exported to Vietnam. That meant there was less rice for his members to buy for milling,

which had contributed to a rise in the cost per ton of paddy from $80 to $100.

Puy's comments tie in with the latest Rice Market Monitor report from the UN's Food

and Agricultural Organization (FAO), which blamed drought and unfavorable rainfall

for a "more than 10 percent" drop in rice harvest here.

The FAO's Monitor noted that harvest estimates had dropped to 3.6 million tons for

2001. The wet season accounted for 2.8 million, with the dry season making up the

balance.

The FAO also expects the decline will hit rice inventories and reduce exports from

Cambodia. It warned that El Nino, a "climatic event" that brings floods

and drought, could further affect rice production in the region.

Rice vendors in Phnom Penh said price rises had already affected them. "We have

seen a price increase of more than 10 percent on all types of rice," said Yeay

Trop, a rice seller based near Phnom Penh's railway station. Trop blamed the effects

of drought and rice smuggling to Vietnam.

The shortfall in rice production means higher imports from neighboring Thailand.

The RMA's Puy estimates that around 30 percent of rice consumed in Cambodia comes

from Thailand. Rice is the staple food with each Cambodian consuming around half

a kilogram of rice a day.

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