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Gov’t adds $50 million to rice fund

Sok Chan / Khmer Times Share:
A worker moves sacks of rice inside a warehouse in Phnom Penh. KT/Chor Sokunthea

The Cambodia Rice Federation, together with millers and exporters, has hailed a recent government move to allocate an additional $50 million to rescue the rice sector and stabilise the price of premium varieties.

“CRF thanks the government, through the Ministry of Economy and Finance, for allocating an additional $50 million to the Rural Development Bank (RDB) to expand the credit available to rice millers and rice exporters. This will stabilise the price of paddy and allow more of it to be stocked, milled, process and exported,” CRF said in a statement.

CRF said it hopes the additional funds will help rice millers and agriculture communities members of CRF to continue collecting rice from farmers, particularly the varieties Phka Rumdoul and Phka Malis (premium fragrant rice) as well as Sen Kro Ob and Sen Pidor.

The harvest of these varieties begins this week, running until early 2020.

“We ask rice millers and agriculture cooperatives able to store more paddy to contact RDB to request a loan, using their current stock as collateral,” it said.

Chan Pich, general manager of Signatures of Asia, one of the country’s leading rice exporters, told Khmer Times he was happy to learn that the government was injecting another $50 million into the fund.

He said a lot of millers invested all their working capital to purchase paddy from August to November, so they are running short of cash now.

“The additional $50 million will help rice millers collect more paddy to store in their warehouse,” he said. “We haven’t applied for a loan yet but we will do it soon to collect more paddy in Banteay Meanchey province,” he said.

“We are also happy that China allowed more Cambodian rice millers to begin shipping to the Chinese market. This is great news for farmers and exporters alike,” Mr Pich added.

Last week, China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) approved the applications of 18 local rice millers that wanted to begin exporting to China. A total of 44 local rice millers can now export rice to the Chinese market.

The additional capital going into the fund will be available to all rice millers and exporters from today.

“RDB is pushing rice millers and rice collectors to continue buying rice at an affordable price and storing it in their warehouses so that it can be used for collateral to access credit from RDB,” the bank said in a statement.

According to CRF, as of the end of November, a total of 350,000 tonnes of paddy had been stored by members of the association. This figure does not include new stock or milled rice for export.

During a board meeting last week, CRF agreed to consider the possibility of expanding to new markets based on the existing mechanism with China through the Ministry of Commerce, who is acting as the negotiator.

CRF noted that the price of premium fragrant rice has dropped by about 100 riel to reach 1,000 riel per kilogram.

“The slight drop in the price is the result of having poor quality. The Malis and Somaly varieties make up only a small percentage of all the rice. Also, the Somaly variety in some areas is not fragrant but hard-cooked rice, which is not in high demand.

“There have also been issues with the quality of the rice in Banteay Meanchey and Siem Reap.”

He noted, however, that the paddy in Kampong Speu, Takeo, Kampot and Kandal provinces had good quality and was being sold at a higher price although supply was not enough to meet the demand.

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