Another truck filled with Cambodian rice rumbles across the border to Vietnam or Thailand.
To local farmers and rice traders, it means a little more cash than they received last year, as rice sells at ever-higher prices in neighboring markets.
But for Yang Saing Koma, every truck that crosses the Cambodian frontier means local farmers are selling themselves short on profits and setting the country up for a rice shortage later in the year after the lion’s share of the harvest has been exported.
When farmers export too much rice early in the year, they must then repurchase rice from Thai and Vietnamese markets later in the year, said Yang Saing Koma, who is the executive director of the Cambodian Center for Study and Development in Agriculture.
Buying back rice from neighboring countries late in the year also means higher prices for consumers, Yang Saing Koma said, adding that local farmers would benefit more by spreading the sale of their rice through to mid-year.
“We have to educate the farmers. If they keep the product until June or July they can make more,” said Kith Seng, an agronomist and director of the Agriculture Ministry’s planning and statistics department.
“But, normally, just after harvest they sell. Every year is like this,” he said.
Though nobody really knows how much rice is produced in the country or exported, Kith Seng said the Ministry of Agriculture estimates a surplus of 2.3 million tons of paddy rice this harvest season.
Government intervention to keep that surplus in the country and thereby stabilize the price of rice throughout the year is not the solution, Kith Seng added.
“Years ago,” he said, “the government tried to ban export of rice. Prices dropped and negatively impacted producers and caused problems at the border.”
The massive amount of rice exported to Vietnam and Thailand early in the year is hurting Cambodia’s chances to compete in the global rice market, said Phou Puy, Federation of Cambodian Rice Millers Association president.
Uncontrolled exporting of rice to Cambodia’s neighbors hurts the FCRMA, whose members generate an average of 330,000 tons of milled Cambodian rice per year, keeping 75 percent in the local market and exporting the rest at higher prices to Germany, Belgium, Malaysia and Vietnam, Phou Puy said. Farmers selling directly to foreign buyers decreases stocks, increases prices and hinders FCRMA’s ability to meet its international orders.
Finance Ministry Secretary-General Hang Chuon Naron said Cambodian rice exports might have already exceeded 2 million tons per year.
He added that rice shortages as a result of exporting occur whenever an area must import to meet demand, which happens year after year in food-insecure rural areas of Cambodia.
Whereas free trade drives prices, he said it also places power in the hands of farmers who choose to keep their produce in the country rather than export.
According to Hang Chuon Naron, rice is currently selling at $200 per ton, compared to $120 a ton one year ago, encouraging Vietnamese rice traders to travel as far as Battambang province to compete with Thai buyers, who are also buying the relatively cheaper Cambodian rice.
Thomas Keusters, director of the UN’s World Food Program, and Yang Saing Koma both suggest that the Cambodian government consider taking a custodial role over rice sales similar to Malaysia, which is planning to set up a national food stockpile of rice to safeguard against rising prices and possible shortages.
The government is already starting to do this, according to Hang Chuon Naron, in the shape of a $5-million loan to FCRMA.
More government-funded, low-interest loans could enable other organizations to buy rice from Cambodian farmers early in the year, store it, and resell it in August at a moderate price, thus averting rice shortages in the domestic market, Hang Chuon Naron said.
But because the government does not regulate rice exports, it is unknown how much rice needs to be stored, Hang Chuon Naron said. So, the country may be exporting rice that is required for domestic consumption.
Only an actual tally of Cambodia’s rice surplus, and a tab on the amount of rice exported, can allow predictions on if, and when, a shortage may hit and cause prices to skyrocket.
© 2007 – 2015, The Cambodia Daily. All rights reserved No part of this article may be reproduced in print, electronically, broadcast, rewritten or redistributed without written permission.