[PHNOM PENH POST]
Thai government proposals to pay above market prices to rice farmers
could complicate Cambodia’s goal of becoming a major milled rice
exporter, according to industry insiders.
Pheu Thai party leader
Yingluck Shinawatra has announced plans to buy rough rice for a
guaranteed price of 15,000 baht (US$505) a tonne, more than 50 percent
above current rates.
The price hike could send Thai rice millers
and exporters looking into neighbouring countries such as Cambodia for
paddy to process and export, say Cambodian millers.
“When
Thailand purchases a lot of rice from Cambodia, there will be price
competition,” said Chan Vuthy, general manager of Phnom Penh’s Golden
Rice Company.
“It will affect the policies of the Kingdom’s rice-export project when there is too much rice flowing into Thailand.”
Cambodia
has targeted exports of 1 million tonnes of processed rice by 2015.
Ministry of Commerce statistics show the Kingdom exported 80,442 tonnes
in the first half of this year.
Prices for Thai rice exports climbed more than 8 percent during July in anticipation of the new policy.
Thai
Rice Exporters Association Vice President Charoen Laothamatas said if
Thai exporters cannot buy expensive rice to mill for export, they may
opt for cheaper rice from countries such as Vietnam, Cambodia and Burma.
“With the ASEAN free-trade agreement, such an alternative would be possible,” he said.
Cambodia’s millers say they worry about being out-competed by Thai millers looking for paddy to process.
Battambang
Province Rice Millers Association President Ngi Lyheng said that area
merchants often export paddy to Thailand to be processed and shipped
abroad, often competing with the province’s millers.
“If there’s a
high demand for rice from Thailand and that causes prices to go up, we
will have to take into consideration how much we purchase because our
spending capital will remain the same,” he said.
Chan Vuthy said
Cambodia faces several challenges when competing with Thai rice
producers, such as storage capacity. However, he noted there was strong
government support in Cambodia to develop a larger rice export industry.
Ministry
of Commerce Secretary of State Chan Nora said there were presently
about 10 international-quality rice mills in the Kingdom, though the
government worked to increase the number.
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