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Rice Exports Up, But Cash Shortage Hitting

Sok Chan / Khmer Times Share:
Rice exports increased 8.5 percent in the first quarter from the same period last year. Supplied

Rice exports for the first quarter of the year jumped 8.5 percent to 162,220 tons from 149,464 tons for the same period last year, but in March the figure dropped 14.5 percent, or 9,592 tons, to 66,275 tons in the face of competition from Thailand, Vietnam and India and a shortage of capital for buyers to pay growers, according to Secretariat of One Window Service for Rice Export Formality.
“Thailand, Vietnam and India are the biggest exporters in the globe. Regarding the downturn in March, the big issue is the lack of capital for exporters, who are now seeking loans to stay in business,” Hean Vanhan, deputy director-general of the Agriculture Ministry told Khmer Times.
Exporters have asked the government for financial assistance and Mr. Song Saran, president of Amru Rice Cambodia, one of the largest exporters, told Khmer Times that if the money does not come through soon, exporters may drop their quantities due to a range of challenges and the impact of El Nino.
He said Amru’s exports were down on last year and that while he does not see the industry collapsing, some of his company’s partners and companies in the supply chain have closed or gone bankrupt and some exporters, lacking loans and cash flow, were slowing down their business.
“I am not an economic analyst, but on behalf of one of rice millers, what I can see is that our supply chain is weak and some have closed for a while. But we don’t have the data to evaluate so we cannot foresee the slowdown or a collapse,” he said.
“There are external challenges, such as Thailand – which has large stockpiles in warehouses even before El Nino hit. So, they still have rice to process and export. In Cambodia, the prices jumped because of El Nino but we don’t have any stocks in our warehouses.
“Then there is a slowdown in demand outside the country. So my company cannot export very much and the quantity may fall.”
Vice president of the Cambodia Rice Federation (CRF) Hun Lak told Khmer Times that if global rice prices recovered the industry would be fine, but if prices continued to fall exports may fall.
“The lack of capital is the big concern and El Nino. People want to buy our rice, but we don’t have the capital to buy the rice and we urgently need a loan from the government,” he said.
Exporters have asked the government for an emergency loan to prevent the collapse of the industry. They say they need money to pay farmers immediately instead of waiting for payments from overseas buyers.
The director of the Center for Policy Studies (CPS), Chan Sophal, said exporters faced competition from Thailand and Vietnam, which are selling at cheaper prices.
Major markets for Cambodian rice include the European Union, China, Malaysia and Britain.

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