Thai rice cuts pose problems

Thai rice cuts pose problems

Thailand’s recent announcement of a 20 per cent price cut within the government rice-pledging scheme will have little impact for Cambodian exports, but farmers may feel the effects, say industry insiders.

In an article published in the Bangkok Post on June 19, Thailand’s cabinet had agreed to reduce the price paid to rice farmers, from 15,000 baht ($490) to 12,000 baht per tonne.

Sok David, vice president of Golden Rice Cambodia told the Post yesterday that he does not think the reduced price will affect the Cambodian rice industry yet as it is still higher than paddy prices in Cambodia.

“We are still getting many inquiries from Thai traders that can not find good prices in Thailand,” David said. “So they are turning to Cambodia for the same or higher quality rice at a better price.”

While Cambodia’s white rice has challenges competing with neighbouring countries, the Kingdom’s fragrant rice export is still holding strong, experts say.

On average, the price of Thai’s fragrant rice is $1,150 per tonne, $100 to $150 higher per tonne than Cambodian fragrant rice.

Song Saran, chief executive officer and President of AMRU Rice Cambodia, said the Thai price reduction may reduce the flow of paddy from Cambodia to its two neighbouring countries.

“Now Vietnam’s rice is too cheap and Thailand reduced the price. So, the farmers will have nowhere to sell the paddy,” Saran said.

Cambodia has about three million hectares for paddy cultivation producing about 9 million tonnes per year in both the rainy and dry seasons.

Saran says changes to the Thai policy will need greater commitment from the entire Cambodian rice industry and the government to counter the impacts.

“It needs the support from government, banks, rice exporters, and private sectors to invest in purchasing paddy rice from farmers during the harvesting,” he said.

phnompenh post