Rice surplus to hit 3.1m tonnes

via CAAI News Media

Friday, 26 March 2010 15:01 Chun Sophal

CAMBODIA is looking at a surplus of exportable paddy rice of 3.1 million tonnes in 2010, but the sector lacks the capacity to process and move it, the Supreme National Economic Council said Thursday.

Total rice production for the year is expected to reach 7.25 million tonnes, providing 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.

“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 US$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.

“We are thinking of ways to make our rice more competitive so that it can be exported because the amount of our left-over paddy is getting bigger and bigger from year to year,” Supreme National Economic Council Chairman Aun Porn Moniroth told the Post on Thursday, following a government meeting.

The council said Thursday 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.

Yang Saing Koma, president of the Cambodian Centre for Study and Development in Agriculture, said the government faces challenges to achieve its production goals, and needs to improve irrigation systems and the technology for growing rice to enable a higher yield.

“I think that the only way for the government to achieve its goal of making Cambodia produce as much rice as it has planned is to give farmers support that enables them to grow rice twice a year,” Yang Saing Koma said.