Rice-policy challenges outlined

via CAAI

Friday, 22 October 2010 15:01 Jeremy Mullins

CAMBODIA’S rice-export industry, still in its infancy, faces three key challenges before exports can reach 1 million tonnes for 2015, according to a co-author of the Kingdom’s updated rice policy.

Supreme National Economic Council senior adviser Mey Kalyan said Prime Minister Hun Sen’s new policy, unveiled in August, to boost rice exports to 1 million tonnes by 2015 was achievable if actions were taken in three crucial areas.

Uncompetitive prices, a lack of export standards, and seaport “bottlenecks” are the largest hurdles the Kingdom faces to meet the Prime Minister’s target, he said yesterday.

“Cambodia is sandwiched between Thailand and Vietnam, the number-one and number-two rice exporters,” he said in an interview. “We are a small country and only starting to walk. We have to be smart and clever.”

Mey Kalyan attended a major rice industry conference in Thailand last week as part of the Cambodian delegation supported by the International Finance Corporation.

At the conference he gauged the demands of would-be rice buyers – with price being a decisive factor.

The Kingdom’s rice exports were comparably more expensive than Thailand and Vietnam, he said.

Rice was farmed in Cambodia at lower costs than its two larger neighbours, but exports become more expensive by the time it reaches the seaport.

Higher costs of milling, storing and transporting the rice in Cambodia compared to Thailand and Vietnam all contribute to high prices for the product.

But reducing costs was a complicated process that could not be solved overnight because it involved a wide range of issues such as high electricity prices and prohibitive interest rates for loans, he said.

The second hurdle – the lack of export standards – was relatively simpler to solve, he said, noting that work was under way in this area with the Ministry of Commerce, as well as its Agriculture and Industry counterparts, working towards establishing international standards for Cambodian rice.

The third major challenge, seaport bottlenecks, was still being looked at, he said, and added that Sihanoukville port was too small for the largest ships to dock.

He suggested that one alternative may be shipping rice down the Mekong to take advantage of the larger port facilities in Vietnam.