via CAAI News Media
Published on: March 29, 2010
PHNOM PHEN (Commodity Online) : Cambodia’s Supreme National Economic Council said the country is looking at a surplus of exportable paddy rice of 3.1 million tonnes this year.
The Council in a report however said the sector lacks the capacity to process and move it as total rice production for the year is expected to reach 7.25 million tonnes.
This will provide an opportunity for increased exports at a time of high world demand, but “there are concerns about the ability of this market to absorb additional volumes of paddy”, the council said in a draft report on rice exports that is still to be finalised, it said.
“The fastest way to increase Cambodia rice exports is to redirect informal paddy trade to formal milled rice exports, given long-term production and infrastructure constraints,” the council said in its report Options for Cambodia Rice Exports.
The sector is hurt by a lack of finance for trading and processing and limited transport infrastructure, it added.
Though traders from Thailand and Vietnam provide about $631 million in paddy purchases, an additional $311 million is needed to support domestic financing, the council said. Only about $18 million in loans went to the milling sector in 2008 and 2009, and $58 million was put into the sector for official export purposes.
The council said that near-term solutions could include bonded warehouse arrangements with Vietnam to overcome high costs of container shipment from Cambodian ports; export sales to the Philippines and Indonesia; and export to the European Union under favourable trade agreements, among others.
Paddy production could reach 15 million tonnes in 2015, leaving 8 million tonnes for export after local demand.
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