Cambodia’s rice exports have dropped as demand from Thailand plummets following the collapse of the country’s state-buying rice plan. The Thai government is selling its stockpiles at a price that’s undercutting its Asian competitors, industry experts said Monday.
Cambodia’s rice exports dropped by 11 percent from January to March compared to the same period the previous before. The drop was from 95,228 tons in 2013 to 84,330 tons this year, according to the Federation of Cambodian Rice Exporters.
Exports to Thailand for the first quarter of this year were virtually wiped out, falling from 13,000 tons in 2013 to 300 tons this year. Last year, Thailand was the sixth biggest importer of Cambodian rice, buying 23,550 tons.
“The reason why exports to Thailand have dropped is because they are trying get rid of their rice and don’t want to import as much from Cambodia,” said Lim Bunheng, chairman of the Cambodian Rice Exporter Association. “[Thailand] selling at a low price is creating greater global demand for Thai rice.”
Under Thailand’s rice subsidy plan, the government bought the crop at above-market rates, aiming to boost farmers’ incomes. But the program ended in February, following a political crisis and the government’s inability to financially support it. Since then, Thailand has been quick to offload its huge stockpile of almost 13 million tons to pay the billions of dollars it owes farmers.
According to a report on Friday by rice industry publication Oryza, Thailand’s five percent broken rice was about $385 per ton, down about $35 per ton from a month ago, and down about $155 per ton from one year earlier. The price of Cambodia’s five percent broken rice on Friday was about $450 per ton.
The report notes that Thailand is now the cheapest origin for rice in Asia.
Independent economist Srey Chanthy says Cambodia needs to have a system in place to cushion farmers from market risks.
“Farmers need to be able to stockpile their harvest during emergencies such as this one,” Mr. Chanthy said.
“But they don’t have the capital to do so, and hence they have to sell their crop as soon as they can,” Mr. Chanthy said.
© 2014, All rights reserved.