Rice storage offers price security

Sok Chan / Khmer Times No Comments Share:
The new warehouse in Battambang province could be used to store rice when prices were low and released to be sold when prices recovered. KT/Chor Sokunthea

Rice millers can expect a certain degree of price stability in their exports with the construction of a 200,000-tonne capacity rice warehouse and a 3,000-tonne silo facility in Battambang province.
The silo is expected to be finished by the end of the year and the warehouse will be fully operational for the 2018 harvest season, according to the CEO of the Cambodia Rice Bank. 
Phou Puy, CEO of the Cambodia Rice Bank, said that once the facility is ready, it will help stabilise prices during the harvest season and will benefit farmers in Battambang, Banteay Meanchey, Pursat and Siem Reap provinces. 
“We spent about $5 million on machines and other facilities for silos and all of these facilities will be installed in July,” Mr Puy said.
Cambodia Rice Bank, which won the $15 million contract to build the facility from the state-run Rural Development Bank in April signed a construction and design agreement with the Cambodian company NGY Investment on the warehouse.
It also signed two other agreements with Taiwan’s Agrosun Co and Thailand’s International Rice Engineering Co to supply machinery for the silos.  
Mr Puy said farmers will no longer have concerns about rice production and price fluctuations after harvests. The rice, he said, could be stored when prices were low and released to be sold when prices recovered.
Phon Nary, director-general of Heng Huch Rice mill in Battambang, said the facility would not benefit his mill but would be of use to farmers. 
He said his warehouse could store about 3,000 tonnes of paddy rice and his silo processes about 45 tonnes of milled rice per day. 
“It is good for farmers in the context of preventing the flow of rice to neighbouring countries, but for me as rice miller, I cannot purchase rice to store there,” Mr Nary said.
Last September, the price of fragrant rice fell to about 600 riel ($0.15) per kilo, leaving many farmers complaining that the price was too low to support their families and pay back farming loans.
The farmers used to receive 800 riel ($0.20) per kilogramme. The fall came after rice mills did not have enough funds and space for storage. There was also a lack of silos for drying and processing paddy rice while the global rice price fell. 
The Ministry of Economy and Finance allocated about $20 million from the emergency budget fund to the Rural Development Bank to implement a special government programme. The money would be used to both stabilise currently falling prices and pay farmers, at market prices, for their newly harvested rice. 
Through this programme, the government will purchase about 90,000 tonnes of rice from farmers, which should increase the rice price to more than 940,000 riel ($235) a tonne.

For in depth analysis of Cambodian Business, visit Capital Cambodia

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