Rice Exports Slow Due to Millers Hoarding

Cambodia exported more than 200,000 tons of milled rice in 2012, the greatest yield on record, though well short of the government target to export 1 million tons by 2015.

Speaking at the Ministry of Agriculture’s annual meeting in Phnom Penh, Agriculture Minister Chan Sarun said that the yield of unprocessed paddy rice in the 2012 to 2013 harvest season had grown by roughly 6 percent to 9.31 million tons, up from 8.8 million tons the previous season.

Milled rice exports were “more than 200,000 tons,” Mr. Sarun said, without giving an exact figure. “Our exports have increased compared with 2011, but only slightly,” he added, pointing to the widely held expectation in 2012 that the flooding of the previous year, which destroyed swaths of rice paddy and drove up prices, would  be repeated.

In July, Prime Minister Hun Sen predicted that, as 2012 was the Chinese year of the dragon, there would be “big floods.”

“All of the rice millers and farmers thought that there was a huge flood coming, so rice millers did not export because they thought that the price of rice in the country would be high,” Mr. Sarun said.

Lim Bunheng, chairman of milled rice exporter Loran Group Plc., said that his firm had withheld some rice.

“We kept 300 to 400 tons of rice paddy for food to help the government in the event of floods, but after seeing no floods, we used that for export.”

Yang Saing Koma, director of NGO the Cambodian Center for Study and Development in Agriculture, said the slow progress in exports of milled rice was more to do with Cambodia’s inexperience as a rice exporter.

“It’s a big goal, but Cambodia needs to learn,” he said, adding that more investment in rice mills and credit for farmers was helping.

Mr. Saing Koma also said that the price farmers had received for normal rice, as opposed to the more expensive fragrant rice, had fallen this year, from more than 1,000 riel, or about $0.25, to only 800 riel, per kg.

However, Mr. Saing Koma said the drop in price was more likely due to the international rice market rather than a surplus created by  rice millers hoarding their product.

“Normally, many Vietnamese come to buy paddy rice in Cambodia,” but last year, Vietnamese exports had fallen as India and Pakistan upped their output, keeping prices low globally, he said.