Following a series of increases in rice prices, Prime Minister Hun Sen on Wednesday announced a ban on rice exports effective today in order to stabilize the cost of the country’s food staple.
“To ensure food security for Cambodia, Cambodia will stop exporting for two months,” Hun Sen said at a road inauguration ceremony in Pailin municipality. “After two months we will reconsider and look at the rice market’s security,” he said.
Prices for a variety of rice increased from between 1,400 riel and 2,400 riel per kg in January to between about 2,200 riel and 3,600 riel as of Wednesday, according to the Cambodian National Rice Millers Association.
In another government attempt to reduce spiraling rice prices, the state-owned agriculture firm Green Trade on Wednesday began selling its reserve stockpile of rice at 1,800 riel a kg, according to a Commerce Ministry official.
The government has come under criticism in recent weeks for price increases in such necessities as gasoline and food. According to reports from the National Institute of Statistics, food prices increased about 20 percent between January 2007 and January 2008.
Kim Savuth, president of the Cambodian National Rice Millers’ Association, said there is no rice shortage, just a high demand from the international market. He said he supported the export ban.
However, SRP Secretary-General Eng Chhay Eang criticized Hun Sen’s decision to ban rice exports, saying the move would hurt Cambodian farmers.
“It is not correct in a free market,” he said of the export ban, adding that the government should lower the price solely by pumping more reserve rice into the market.
Economist Sok Sina said the export ban and selling of the government’s rice reserve should be effective in lowering prices.
“We are in the critical situation at the moment,” he said. “If you look at the market, you see the consumers complaining about the increasing price of many goods.”
He said an export ban should be effective enough that it would not need to be longer than two months.
Phou Puy, president of the Federation of Cambodian Rice Millers’ Associations, said he would prefer the government didn’t enact an export ban, though he said he didn’t oppose it.
He said the policy will lower profits but won’t have a major effect on rice farmers if it only lasts two months. He also pointed out that Cambodia’s World Trade Organization agreement ensures foreign trade.
In his speech Wednesday, however, Hun Sen specifically claimed that the export ban would not conflict with the country’s WTO obligations.
He also said the export ban is not intended as revenge against Thailand, which has restricted the export of cooking gas to Cambodia. Importers have blamed a shortage of gas imports from Thailand on the recent spike in cooking gas prices in Cambodia, which have almost doubled in a week.
Suon San, deputy director of the Commerce Ministry’s planning department, said Green Trade will continue selling its 6,000-ton emergency reserve of rice until prices decrease.
“I hope that within one week the price of rice will be back to normal,” he said.
Green Trade has initially released 140 tons of rice to be sold in Battambang, Siem Reap, Kompong Cham, Kompong Thom, Takeo and Prey Veng provinces, and Phnom Penh, Suon San said.
He added that he expected the largest percentage of the rice would go to Phnom Penh because of the amount of concern in the capital.
(Additional reporting by Tim Sturrock)