via Khmer NZ

Source: Reuters

18/08/2010

Aug 17 - Cambodia is targeting annual rice exports of 1 million tonnes within five years, Prime Minister Hun Sen said on Tuesday, a dramatic increase from the current volume of about 20,000 tonnes.

That goal is still small compared to its neighbours, Thailand and Vietnam, which are aiming to ship 8.5 million tonnes and 6.1 million tonnes respectively this year.

But impoverished Cambodia has shown signs of aspiring to the same league as Thailand and Vietnam, respectively the world's biggest and second-biggest rice exporters.

It announced earlier this month it was looking for foreign investors to boost its fledgling rice milling sector so that it can reap higher dividends from its grain crop, much of which is currently sent to Vietnam to be milled and re-exported.

Cambodia is the world's 15th biggest rice producer and plans to raise rice production to 9 million tonnes of paddy by 2015, up from the current 7 million tonnes, industry officials said.

"The market for rice is still big," Hun Sen said during a speech on development in Cambodia, noting that recent natural disasters have damaged food crops across the world and raised the value of food commodities.

To reach the 1 million mark, Cambodia needs foreign investment as well as government-backed soft loans to improve rice productivity and boost its fledging rice milling sector, Hun Sen said.

After years of political turbulence, including civil war and the deadly Khmer Rouge era, Cambodia's economy was in tatters by the end of the 1980s. In some years it has had to import low-quality rice from Thailand.

Hun Sen said foreign investment in creating an adequate rice milling sector would help support Cambodia to reap higher dividends from its grain crop, much of which is currently sent to Vietnam to be milled and re-exported.

Apart from developing milling houses, the government also launched a loan-supporting programme by urging local banks to provide money for rice-related business.

The government has pledged to help repay half of the debts if debtor failed to pay back the loan.