Cambodia’s first large-scale rice bank offering both financial and storage services launched on Thursday with the aim of keeping a crucial supply of paddy available for local millers and exporters.
Thaneakea Srov (Kampuchea) Plc in Battambang province will consist of industrial dryers capable of drying 600 tons of paddy per day and a warehouse with a capacity of 100,000 tons.
“With this bank, the quality and quantity of rice supplied to local and foreign markets will be more stable, and buyers will have more confidence,” CEO Phou Puy said.
Ny Lyheng, general manager of local rice exporter Baitang (Kampuchea) Plc and deputy CEO of the new rice bank, said a lack of storage facilities in Cambodia will make it difficult for the industry to meet the country’s goal of exporting 1 million tons of rice by 2015.
“Amid growing rice exports, there are still challenges, especially securing the right quantity and quality of rice…. Quantity and quality cannot be guaranteed, due to the difficulty of meeting overseas orders and a lack of high technology,” Mr. Lyheng said following an event to launch the bank at the Sunway Hotel in Phnom Penh.
Thaneakea Srov’s services will include purchasing, storing and drying rice, as well as disbursing loans in exchange for paddy put up as collateral.
The bank will begin operations with a stock of between 70,000 and 100,000 tons. If it can find funding from financial institutions, Mr. Lyheng said, the bank will open a second branch within the next three years.
Andy Lay, managing director of milling company City Rice Import Export, said the bank will help Cambodia export rice in larger quantities by serving as insurance against floods and drought.
“We will [decide] whether to join the bank based on the results after the harvest season, which is in late October or early November. Otherwise it’s hard to say because it’s a big project,” Mr. Lay said.
Chan Sophal, an economist at the Cambodian Economic Association, said ensuring quality storage facilities at low costs would be the key to the Thaneakea Srov’s success.
“It’s a good initiative. I think it will work if the operational costs are not so high,” Mr. Sophal said.
“The idea is to retain paddy that otherwise goes to Thailand and Vietnam,” as millers have limited storage facilities, he said.
Yang Saing Koma, president of the Cambodian Center for Study and Development in Agriculture, said while there are already many small rice banks in communities throughout the country, they have limited resources and offer only basic services.
Although Thaneakea Srov will be a boon to the industry as a whole, Mr. Saing Koma said, a decentralized system, whereby local communities can store and mill their harvest, would benefit farmers more directly, especially as they can retain useful byproducts such as husk.
“If you want to centralize it [rice storage and milling], it’s OK, but it’s better if you decentralize it, because it will also save transport costs and be easier to organize,” he said.