Sep 13, 2010


Cambodia Increases Rice Exports:

  • Sep 13, 2010
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  • For most Cambodians, improving quality of life and basic need means improving the quality of crops and growing rice. Agriculture is one of Cambodia’s most important economic sectors, owing to the fact that the vast majority of the population a full 85 percents are farmers. Yet agriculture output in Cambodia lags far behind that of many countries, making it more difficult for farmers to live off their land. Thus, agriculture development has become a key area of focus for government leaders, NGOs and private companies alike. By introducing farmers to new techniques and technologies, they hope to improve quality of life for farmers and help boost output at every stage of production from seed to sale.

    In recently, Cambodia and Vietnam are now said to control up to 60 percent of rice exports in the ASEAN region. This has raised fears and concerns from Thai rice growers, the concerns being raised by the Thai rice exports themselves.

    Thai Rice Exporters Association Director, Somkiat Makcayathorn said that Thailand is facing enormous challenges to its rice exports to the ASEAN market, brought about by relatively higher prices and tariff cuts under the ASEAN Free Trade Area or AFTA.

    This has made Thai rice less appealing to regional buyers, resulting in Thailand giving already lost its market leadership in ASEAN.

    Rice from Vietnam and Cambodia now control up to 60 percent of the market, according to Somkiat.

    Thai rice makes up only 30 percent of the ASEAN market share, down from as much as 60 percent five years ago, as key buyers including Singapore, Malaysia and the Philippines have turned to Vietnam.

    Vietnam last year exported 6.5 million tones of milled rice, with the figure for the first five months of this year totaling 3.1 million, slightly lower than 3.3 million tones for Thailand, said Samkiat.

    “More importantly, Vietnam’s rice exports are mainly in the form of white rice, while Thai rice shipments have parboiled and glutinous rice combined.”
    Vietnam last year exported 2.8 million tones to the region, mainly to the Philippines, Malaysia and Singapore, while Thailand’s figure was only 640,000 tones out of 8.5 million globally.

    Somkiat also warned that Thailand could no longer be complacent about quality, as the renowned aroma of Thai Hom Mali (Jasmine) rice was not considered as good as it was five years ago.

    More worrying is the fact that Cambodia has adapted some Thai Hom Mali varieties and ships the paddy to Vietnam, capitalizing on the free trade pact.

    Cambodia aims to produces as much as 15 million tonnes of paddy by 2010, resulting a surplus of eight million tones for export.

    Currently, approximately 2.8 million hectares of land are being cultivated with rice with rice harvest for 2009 being registered at 7.3 million tonnes. Although rice yields had increased marginally on the average from 2.74 tons per hectare in 2008 to 2.83 tons per hectare last year, the results, encouraging as they may be, is nevertheless disappointing as double cropping has not taken a strong footing and rice species has also not been developed extensively.

    Potential importer of Cambodia’s rice have however cautioned that Cambodian rice export prices have been inflated to try taking advantage of a sustained push for increases in bilateral trade between several ASEAN nations with Cambodia.

    A potential buyer said that Cambodian rice, especially Jasmine, is being quoted at about 30 percent higher than Thai FOB price for Grade A Jasmine rice, which makes it above USD 1,000 pee metric ton.

    “The price is not only higher but the quality of the rice is also lower, in terms of fragrance, size of grains and general quality of the milling. Thus, as much as we want to buy Cambodian rice, our efforts are being hampered by unreasonable prices from Cambodian exporters, “the buyer said.

    He said that a recent rice miller’s association delegation to a neighboring country saw the Cambodian parties being aggressive in promoting Cambodian rice exports into the country, adding that such aggressive moves were welcome but the results of the rice samples brought for the campaign were disappointing in many aspects.

    “Prices quoted were higer, grains short to medium sized and to top it all, they had quoted some quite outrageous prices for documentation, which gives a bad impression on the Cambodian side.”

    “We are importing rice from several countries and parties and are aware of the peculiarities and practices of each exporting country and party. However, in the case of Cambodia, just because they have managed to export some small quantities to largely EU nations, they have fallen into a comfort position that they can dictate prices and unreasonable “documentation” charges, which we know do not really exist,” the buyer said.

    This writer, having been  focused on rice cultivation and the importance of industrialized rice cultivation beliefs that standardization in export documentations and other required document from the varios ministries such as Commerce and Port authorities/customs.

    “A one-stop sop for processing rice export documents is quite essential and having a transparent documentation process which is also widely publicized would assist further in boosting rice exports.”

    “In addition, a quality control body to ensure export grade of rice along with other grains would further enhance rice and grain exports from Cambodia. Cultivation, production and processing techniques should also be upgraded as theses will have a material effect on the processed rice grades and quality.”

    In this context, the nation’s irrigation infrastructure has been gradually growing over the past two decades. This has been a major focus of the government in terms of enabling farmers to achieve higher crop yields, reducing vulnerability to drought, stabilizing rice production potential, and increasing national food security or self sufficiency.

    Despite this growth, Cambodia’s irrigation resources remain significantly underdeveloped. In comparison to similar rice cultivation environments in the lowlands of Thailand or the Mekong Delta in Vietnam, Cambodia has barely scratched the surface in regards to bringing higher concentrations of rice land under irrigation.

    In Cambodia, MOWRAM (Ministry of Water Resources and Meteorology) estimates that approximately 24 percent of the country’s rice land is irrigated. By comparison, 50-75 percent of the land in the lowlands of south-central Thailand and southern Vietnam has been successfully brought under irrigation after decades of investment and development.

    The Cambodian government recognizes that its goal of joining the ranks of the world’s major rice export nations will require considerable additional development of its irrigation infrastructure in the heavily populated southeastern Mekong River floodplain and in the lowlands surrounding Tonle Sap, Cambodia’s “great lake”

    MOWRAM has reported that they successfully brought approximately 650,000 hectares of rice area under irrigation between 1996 and 2007, and have plans and finance sufficient to irrigate and additional 800,000 hectares over the next decade.

    The government has had a very proactive campaign in recent years to acquire financial assistance (grants and loans) from international donors and foreign government for Major construction projects directed at the agricultural and energy sector.

    In total, MOWRAM acknowledged that it had received commitments totaling US$ 1.1 billion for irrigation infrastructure development, with an additional US$850 million pledged in October, 2009 from the Chinese government for the construction of dams (hydro) irrigation, roads, and port upgrades.

    The roughly two billion dollars in pledged development assistance has the potential given it is leveraged wisely, to substantially alter the status quo in the agricultural sector. (Cambodian Business Review, August 2010)

    1 Responses to “Cambodia Increases Rice Exports:”

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