[PHNOM PENH POST]
Cambodia's milled-rice exports struggled to compete on international
markets as increased supply from India forced down regional prices,
experts and officials said yesterday.
The Kingdom has continued to fill orders made in 2011, but industry
insiders said new orders for the grain fell in January. Higher energy
and milling costs in Cambodia could further stymie new orders for milled
rice in February.
Tim Purcell, director of Agricultural Development International, confirmed that orders for milled rice fell last month.
“Compared
to the last quarter of last year, January saw a significant drop in
orders,” he said yesterday, adding that increased stock in India had
driven down prices in the region.
Although the falling figures
present concerns for the future of the sector, January’s decrease was
largely seasonal, Purcell said. Supply was high as regional producers
wrap up their harvest season. The trend could continue this month, he
said.
Despite marked increases in exports in 2011, the sector
could fail if prices remain higher than competitors, Kalyan Mey, advisor
to Cambodia’s Supreme National Economic Council, said during an
unofficial roundtable discussion on the country’s rice policies.
“If
[the European Union] was to impose tariffs, we would deteriorate much
more,” he said, referring to the preferential tax treatment that allows
Cambodia tariff-free rice exports to Europe.
To compete with
export giants such as India, Thailand and Vietnam, Cambodian exporters
and traders must cooperate to form an economy of scale, Kalyan Mey said.
Four of Cambodia’s top rice exporters have said they saw a
significant decrease in forward orders in January, according to an
industry source who spoke on condition of anonymity.
Access to
credit for purchasing large quantities of paddy rice is limited, as is
capital for upgrading the countries milling facilities, Phou Puy,
president of the Federation of Cambodian Rice Millers Associations, said
yesterday.
The Rural Development Bank has said US$600 million is
needed in the sector to buy, process and transport 1 million tonnes of
milled rice, a figure Prime Minister Hun Sen has set as an export goal
for 2015.
The bank loaned $36 million to the sector in 2010 and 2011.
Cambodia’s
rice production has been a huge success, given its meagre beginnings in
the early 90s, Purcell said. The country went from importing about
200,000 tonnes of milled rice in 1994 to exporting 330,000 tonnes of
paddy the following year, he said.
Milled rice exports have also
seen dramatic increases, from 12,440 in 2009 to 173,00 tonnes last year.
“The achievements in the past 15 years have been quite amazing,”
Purcell said.
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