Logo of Phnom Penh Post newspaper Phnom Penh Post - Govt grapples with rice supply

Govt grapples with rice supply

Govt grapples with rice supply


The government is trying to stop the export of unprocessed rice to boost local supply, but the long-term solution is to invest in infrastructure, especially irrigation, officials say.

High food and energy prices

are driving up inflation across Asia and Cambodia is no exception.

The National Institute of

Statistics (NIS)

reported that the consumer price index rose 18.7 percent between January 2007

and January 2008 with the big hikes coming in the last quarter of the year.

Food prices increased 24.2

percent in the same period, according to the report released on March 3.

The Cambodian government’s

official figure for inflation in 2007 is 5.8 percent, which is a 12-month

moving average. But according to the NIS,

the three-month moving average for the last quarter of 2007 was 9.6 percent,

with December alone running at 10.7 percent.

Still, the government’s

official forecast for 2008 was for four percent inflation, which some bankers

said sounds low.

"Fuel and food – especially fish,

pork, meat generally have increased a lot,” said Chea Sok, chairman of the

ACLEDA board.

"Transport costs have

increased by 13 percent. I don’t expect transport to go down – oil is still

going up. Before it was $1 for one liter; now it is $1.2 or more. And nearly every

vegetable is transported in,” Sok said.

Cambodia is fortunate that rice prices have not yet shot up as

much as in other parts of Asia.  Sok said that "rice management” was key.

"The problem is that

[farmers] export it now, but then you have no rice in August or September,” he


The Ministry of Finance is

attempting to manage the rice supply through a $4-million loan to the

Association of Rice producers to buy up Cambodian surplus rice now and release

it onto the market later in the year.

Sok said the government is

trying to stop the export of unprocessed rice but the long-term solution to

this problem is to invest in infrastructure, especially irrigation, in order to

double or triple rice production.

He said he expected that January

and February inflation will increase but from May onwards it will go down and

prices will decrease.

He said 7-8 percent inflation

would be a serious problem. "Five percent we can manage, more than that we

cannot manage. It would really affect the poor people.”

Across Asia,

as inflation rates rise, governments are turning to price controls and

government subsidies to try and curb inflation.

In China inflation surged to an

11-year high of 7.1 percent in January and looks set to climb further this

month. After recent severe snow storms, the government froze the prices of energy,

transport and water, and announced that producers of essential food items, such

as meat, grain, eggs and cooking oil must seek approval before raising prices.

Cambodia has not introduced price controls. While many experts

warn the Kingdom’s heavy reliance on imports makes the economy vulnerable to

shocks such as increases in fuel prices, others argue that the current spike in

food inflation is due to normal seasonal fluctuations.


  • Chinese influx pushing locals, Westerners out of Preah Sihanouk

    Some within the Kingdom’s tourism industry have speculated that the recent influx of Chinese visitors may hinder domestic tourism as the price of accommodations in the coastal city of Sihanoukville continues to rise. Preah Sihanouk province, which has become a hotbed for Chinese investment

  • ‘Dire consequences’ from sanctions, warns AmCham

    American businesspeople in Cambodia have warned that any sanction against the Kingdom would have “dire consequences” that could push Cambodia even further into the arms of China. In a letter to US senators and representatives dated Monday, the American Chamber of Commerce Cambodia (AmCham) said

  • CPP: ‘Behave or Sokha suffers’

    The ruling Cambodian People’s Party (CPP) spokesman warned Kem Monovithya on Thursday that her attempt to damage “national reputation and prestige” would lead to her father, Kem Sokha, receiving even harsher punishment. Sok Eysan issued the warning as Monovithya, who is the court dissolved

  • Preah Sihanouk beach developments halted

    After receiving an order from Hun Sen, Minister of Land Management Chea Sophara led a team of experts and relevant officials to Sihanoukville to call a halt to the illegal development of a beach. The prime minister ordered the Prek Treng beach in Otres commune