In the first eight months of the year, Cambodia exported 1.6 million tonnes of paddy rice to neighbouring Vietnam through informal channels, a recent report from the Ministry of Agriculture revealed.
That figure is significantly higher than the total amount of milled rice shipped abroad through official channels, which from January to August was just over 342,000 tonnes, according to the ministry.
Due to a lack of storage and processing facilities in the Kingdom, farmers often have no alternative but to sell their paddy rice to middlemen who then bring it to Vietnam through informal channels, according to the Rural Development Bank.
Lun Yeng, secretary-general of the Cambodia Rice Federation (CRF), yesterday told Khmer Times that the rice exported informally is a mixture of varieties, referring to it as “mixed rice”.
“Most paddy rice exported informally is mixed rice. This means these informal exports are not affecting exports of milled rice, which are often premium varieties like fragrant rice.”
He explained that farmers sell their rice to middlemen to earn a quick buck during harvest.
“Farmers sell it to middlemen because is easier, since these middlemen often go to the rice fields to buy the product personally,” Mr Yeng said.
Mr Yeng said that, in the wake of the ministry report, CRF will strive to reduce informal exports by educating farmers on the rice varieties that fetch higher prices and enjoy the highest demand.
To reduce the sale of paddy rice to middlemen, in 2017 the government launched an emergency fund for the sector. The scheme give millers access to loans to purchase paddy rice and build the necessary facilities to store and treat it.
The lending mechanism helps keep the price of the commodity stable, according to RDB, the institution in charge of disbursing the loans.
In the 2017-2018 harvest, Cambodia produced more than 10 million tonnes of paddy rice, according to the ministry. The rice surplus reached 5.6 million tonnes, the equivalent of 3.5 tonnes of milled rice.
Last year, Cambodia exported 626,265 tonnes of milled rice to foreign markets, a drop of 1.5 percent year-on-year. China was the biggest buyer.