Border Closures Pushing Up Market Prices in Phnom Penh

One week of border closures have caused a negligible price increase on Thai goods in Phnom Penh markets, but vendors in the capital said Wednesday that if another week or two passed, their stockpiles would dwindle and prices would spike.

The Thai government said Wednes­day that checkpoints along the border would be opened today, but the weeklong border closures underscored how important Thai imports are to Cambodians.

Cambodia imported nearly $222 million in Thai goods in 2000, which was the most of any Asean country and accounted for nearly half of the $553 million in total imports to Cambodia from Asean countries, according to Ministry of Commerce statistics.

Phnom Penh market vendors interviewed Wednesday before Thailand announced the border openings said the goods that were most likely to see a price in­crease were milk, sugar, mono­sodium glutamate and instant noodles, especially the Thai “Mama” brand.

In the week since Thailand sealed its borders, Phnom Penh prices for fresh milk rose $1 per case of 24, 470 milliliter boxes from $19 to $20. The price of 50 kg of Thai sugar rose by nearly $1.50 to $63.50. The price of MSG rose about $0.20 higher per kilogram to about $1.40.

Vendors said they had been charged more by their distributors, therefore forced to raise the costs of their goods.

“When they sold to me for a little rise, I have to raise a little bit to make a profit,” said Suy Leang, a vendor at Phsar Kandal. “Other­wise, we take a loss.”

“I’m quite worried,” said San Sean Hong, a vendor at Phsar Thmei. “If the border stays closed, the market will face a shortage of goods. Then my customers will change their minds [to buy] goods from Vietnam or China.”

In 2000, Cambodia imported more than $91 million in goods from Vietnam and $112.5 million from China, according to the Commerce Ministry.

The slight price buoy showed the free-market principles of supply and demand in Cambodia’s fledgling economy, which was state controlled from 1979 to 1991.

Fewer supplies bring greater demand, so the price of goods will rise, Commerce Secretary of State Khek Ravy said Wednes­day. “There is no way to stop the rise, unless the goods’ supply flows back.”