The price of fragrant rice exports to international markets has doubled in the last month, from $50 to $100 per matrix ton, according to the Cambodia Rice Federation (CRF).
However, the domestic market trading price for white rice, the most in-demand variety within the country, has remained stable.
Explaining the disparity, CRF secretary-general Lun Yeng said that the export price rocketed between March and April as a direct consequence of COVID-19 border closures and lockdowns.
“Due to the pandemic, many countries are in lockdown which makes the transportation of goods, including rice, difficult and this has led to the increasing price of the commodity. Demand has also increased because the destinations we export to are running low on stock,” he said.
That demand has also seen the price of Cambodia Jasmine rice (Malys Angkor) increase by $70 to $950 per matrix ton.
Currently, Cambodia is only allowed to export fragrant rice because it fetches a higher price in the international market. In recent weeks, the Cambodian government temporarily banned the export of white rice and paddy until further notice to ensure there is enough in stock to meet domestic demand through the uncertain times ahead created by the spread of COVID-19.
Paddy rice is currently priced at 820 Riel ($0.2) per kg, spelling good news for the nation’s farmers of the staple, according to Veng Sakhon, minister of Agriculture, Forestry and Fisheries.
“Farmers are happy because rice traders are offering a good price of 820 riel per kg, a 120 riel increase compared to the previous record,” Sakhon wrote on his Facebook page earlier this week.
According to the Philippines-based International Rice Research Institute (IRRI), increasing rice prices could become a global trend in both the medium and long term if the COVID-19 pandemic shows no sign of abating.
Production shocks coupled with a massive surge in demand would be the main cause of price hikes, said Jean Balié, head of IRRI’s Agri-Food Policy Platform.
“In the medium term, any shock on production that could result in a lower-than-expected harvest could trigger a price crisis. Likewise, a massive surge in demand fuelled by panic buying and hoarding could also trigger a price rise,” read a quote from Balié in the Philippine-based publication BusinessMirror on April 14.
“Decisions like limiting the flow of rice within and between countries, including export bans and other trade restrictions as well as excessive buying, can all precipitate a surge in rice price in spite of good market fundamentals,” he added.
Based on IRRI analysis, Balié said world rice prices could spike by at least 19 percent, to as high as 52 percent, if exporting countries, such as Vietnam, Cambodia and India suspend shipments. Under these scenarios, the global price of Thailand 5-percent broken rice would increase from $525 per metric ton to about $671 metric ton.
Cambodia shipped out 230,948 matrix tons of rice in the first quarter this year, a 35 percent increase compared to the same period in the year before.
- Tags: Rice