Cambodia’s milled rice exports only grew by a dismal 0.7% last year compared with 2015 and this was the lowest since 2014, according to government figures released Thursday.
“Last year Cambodia only exported 542,144 tonnes of milled rice and the lowest exports were in the first quarter of the year and December,” said Hean Vanhan, director-general of the agriculture department at the Ministry of Agriculture, Forestry and Fisheries.
“The fall in rice exports in those months really affected our overall performance,” said Mr Vanhan.
In the first quarter of last year, a severe drought affected rice production and through the year rice millers had been complaining of the flow of low-grade cheaper rice into the country from Vietnam, according to a report in Khmer Times.
Last March, rice millers and exporters wrote to the government urging intervention due to stiff competition in export markets as well as domestic ones. In the letter, they said they were facing a cash crunch due to a flood of low-grade rice from Vietnam while stressing that bankruptcy was widespread among farmers, millers and exporters alike.
In late September, the government responded by making out a $27-million loan to rice millers to purchase paddy rice from farmers, in a bid to prevent rice prices from falling further.
“It’s not only Cambodian rice millers that are facing a fall in income due to low prices. Millers in neighbouring countries are also facing the same predicament,” said Mr Vanhan.
Hun Lak, vice-president of the Cambodia Rice Federation (CRF), said that the fall in milled rice exports was expected.
“We already predicted that rice exports would fall sharply in 2016. There were external factors beyond our control,” he said.
Mr Lak said Cambodia’s rice production costs were still very high compared with Thailand and Vietnam and that made the kingdom’s rice exports very uncompetitive in regional markets.
“When the price of rice is cheaper in neighbouring countries, it is obvious that buyers will import rice from those countries,” he said.
Song Saron, president of Amru Rice (Cambodia), said the lack of warehouses made it difficult for rice millers to store paddy rice when prices are low and export them when prices climb.
“If there are big rice storage warehouses and paddy drying facilities, it will help both farmers and rice millers and rice exporters,” said Mr Saron.
According to the CRF’s Mr Lak, the outlook for this year seems more positive.
“China has formally agreed to purchase 200,000 tonnes of rice annually from Cambodia to help the country’s rice farmers and millers,” he said.
Mr Lak said CRF was working with the Ministry of Commerce to seek more markets for Cambodian rice.
“We are negotiating with Indonesia and Timor-Leste. Recently, we have had orders from Malaysia.”