Vietnamese rice exporter face challenges from foreigners in Cambodia

Vietnamese rice exporters will face tough competition from foreign countries looking to exploit advantages that Cambodia presents as a beneficiary of the the EBA (Everything But Arms) initiative, says an Econet report.

Under the EBA, Cambodia, as a least-developed-country, enjoys zero tariffs and no quotas for exporting its farm produce, especially rice, to the EU.

More competition from Thai rice millers

Thai government proposals to pay above market prices to rice farmers could complicate Cambodia’s goal of becoming a major milled rice exporter, according to industry insiders.

Pheu Thai party leader Yingluck Shinawatra has announced plans to buy rough rice for a guaranteed price of 15,000 baht (US$505) a tonne, more than 50 percent above current rates.

Chinese firm seeks rice from Cambodia

Chinese agricultural company Sino Grain was in Phnom Penh this week, researching the possibility of importing Cambodian milled rice, according to a ministry statement.

Minister of Commerce Cham Prasidh hosted the company’s director general, Xu Ge Fei, and other Sino Grain delegates yesterday, the ministry said.

“With a population of 100 million, Guangdong requires 1 million tonnes of milled rice per month. So food demand is very high, and requires importing for supply and stock,” Xu Ge Fei was quoted as saying in the statement.

Vietnamese trade with Cambodia jumps 41%

The trade value between Viet Nam and Cambodia in the first five months rose by 41% to more than US$1 billion, the Viet Nam Trade Office in Phnom Penh said.

Viet Nam’s exports were worth $891 million, an increase of 139 per cent, while Cambodia’s exports rose by just 3.2 per cent to $124 million.

Rice millers get first export orders from China

Cambodia’s largest rice exporters say they have begun securing their first orders from Chinese buyers, with shipments slated for later this year. 

Loran Import Export Company has secured contracts to export 240 tonnes of fragrant rice at US$890 in October, its President Lim Bun Heng said.

“Previously the company has never exported rice to China – only to European and African markets,” he said.

However, with its expanding population, he reckons China will become an important market for Cambodia’s rice exporters in the future.

“I think China will be a big market in the future, because this country has a large number of people, and increasing demand for rice,” he said.

Toyota joins Huay Chuan / Joint venture eyed for Cambodian rice

Toyota Tsusho, the trading arm of Japan’s Toyota Motor Corporation, has teamed up with Thailand’s Huay Chuan Rice Co to cash in on Cambodia’s growing rice industry.

The alliance, which includes Malaysian investors, has been in talks with Cambodian businessmen for a venture that would initially set up a rice mill and processing plant for export.

Cambodia bans imports of chicken products from Thailand

Cambodia’s ministry of commerce on Tuesday prohibited imports of chicken products from Thailand.

“The ministry of commerce instructs all levels of authorities along the border between Cambodia and Thailand to prevent all imports of chicken products from Thailand even though the products have had phyto-sanitary certificate in order to protect our people health,” said a directive signed by the minister of commerce Cham Prasidh. “The ban will take effect from the signing date until there is new directive.”

720 million USD loan needed to improve rice millers competitiveness

Cambodia’s Small and Medium Industries Association warned that domestic rice millers require US$720 million in loans this harvest season, or they risk being out-competed by foreign merchants.

“We cannot compete with buyers from Thailand and Vietnam to buy grain if local rice mills can’t receive more capital from the government or private banks,” said the association’s secretary general Ut Ren.

Cambodia has about 100 millers, which purchase paddy from farmers, process the rice and sell it to dealers. If the millers are able to borrow short-term funds, they can purchase more paddy and sell more processed rice.

Cambodian Government Double Rice Miller Lending Fund

“The money is a small amount compared to market demand of $350 million. Though, it can keep prices stable as they often fluctuate because of buyers from neighbouring countries.”

The government, he said, was also preparing a $25 million fund to guarantee 50 percent of credit offered to the rice industry by commercial banks.

“We are preparing to set up credit-insured fund with 105,000 million riel guarantee for banks donation loans to rice millers,” he said.

Though, Mey Vann said that the policy was not set to be implemented this year as it required in-depth preparation. “We are working with World Bank and IFC and we schedule to involve [it] out in 2012,” he said.

RDB Head Son Koun Thor encouraged cooperation from the private sector, especially commercial banks, in donation agricultural loans.

Source: CambodiaOrganic

Boost in paddy purchase and processing

The Cambodian Rice Millers Association has purchased 380,000 tonnes of paddy over the past seven months for processing, a 10 percent increase on the period a year before, according to association President Phou Puy.

The growth is due to increased financial support from the government through loans from public and private banks, though millers themselves still supply the majority of capital, he said.

“The rice we bought directly from local farmers averaged US$250 per tonne, of which the millers pay 55 percent directly and the rest come from loans,” he said yesterday.