Corn prices have been steadily rising since the government intervened to stabilise the staple food earlier this month, according to Commerce Minister Pan Sorasak.
Mr Sorasak said the corn price is no longer a cause for concern since customs and Cam-Control officials have stopped charging service fees on exports, while the Rural Development Bank is offering $27 million in loans to silo owners at low interest rates.
He said the Commerce Ministry is also studying the possibility of contract farming between firms and corn farmers to ensure price stability.
“We have actively been working to stop the falling price of agricultural products, especially the recent fall in the corn price,” Mr Sorasak said. “Now the corn price is up and farmers are happy.
“We also have to improve infrastructure such as roads, silos and storage facilities, to prevent the issue happening again.”
The corn price has edged from 380 riel ($0.09) per kilo to 440 riel ($0.11), according to Say Sophat, director of the Department of Agriculture in Pailin province. He said he expects the price will continue increasing to about 490 riel per kg.
Mr Sophat said the increase in the price was due to an improvement in the quality of seeds and lower water content. Corn harvested earlier in the season had a higher water content, forcing the price down.
He said Pailin has more than 10,000 hectares of cultivated land for growing corn but farmers have only harvested about 40 percent so far. At the moment, corn from the province is only sufficient for the local market.
“Our department is continuously working to inform farmers about techniques for producing corn, such as how to store it properly and making sure the corn is ripe for picking and not affected by rains at harvest time,” Mr Sophat said.
Kim Hout, director of Battambang’s provincial commerce department, said the corn price in Battambang yesterday was up from 466 riel (about $0.11) per kg to 490 riel (about $0.12) per kg.
He said his department has pushed silo owners to cooperate with local companies to supply corn to factories, rather than only depending on the Thai market.
“Less than 40 percent of corn has been harvested in Battambang province and the harvest season will end this month, Mr Hout said. “We produce more than 400,000 tonnes of corn, with 35 percent to supply the local market and 65 percent to the foreign market,” Mr Hout said.
“Farmers are no longer concerned about the corn price since the price is up, while their production cost is an average of 360 riel per kg.”
RDB chief executive Kao Thach said the bank has so far only received one application for a loan from a silo owner in Pailin province. That applicant has offered their 1,500 tonnes of corn as collateral with RDB.
“We have met more than 100 silo owners from Battambang, Pursat, Banteay Meanchey and Pailin provinces but so far only one asked for a loan,” Mr Thach said. “We are open for all corn silo owners to request loans at a five percent interest per year if they lack the working capital to purchase corn from farmers,” he said.
“We can also help silo owners who have less than 1,000 tonnes of corn to put forward as collateral.”
Roeung Lon, a corn farmer from Kamrieng district in Battambang, said the price of his corn has increased to 430 riel per kg from 360 riel earlier this month.
Mr Lon, who has 10 hectares of corn, said the price needs to increase further to 500 riel per kg for him to make a profit. Even at 430 riel per kg, production costs are still a problem, he said.
“This harvest season I collected about 30 tonnes when price was 360 riel per kg. My production cost is about 400 riel per kg so now I need 500 riel per kg to make any revenue,” he said.