Traders unable to buy paddy as prices soar
As a ban on white rice and paddy exports is set to go into effect this weekend, Vietnamese traders seize the moment to buy in bulk, buoying prices beyond what local rice millers and traders are able to pay.
Prime Minister Hun Sen on Monday ordered the suspension of white rice and paddy exports from Cambodia from 11:59pm on April 5, on the grounds of securing domestic supplies while Covid-19 is continuing to spread in Cambodia.
He told the Ministry of Economy and Finance to look into the possibility of disbursing funds to millers to buy paddy from those who had previously sold it to traders in neighbouring countries.
“Let the rice millers buy paddy from those who are harvesting and need to sell it, and buy all the paddy to maintain good prices, and avoid lower prices while there are no traders from Thailand and Vietnam,” the prime minister said.
Chhun Thom, president of Chhun Thom Rice Miller located in Prey Veng province’s Svay Antor district, told The Post on Tuesday that the local buying activity level has remained largely unchanged.
This, he said, is because farmers are taking the opportunity to sell their remaining dry-season harvest paddy stock along the border until the order comes into effect. “My rice millers are not buying much now . . . as the price is rising,” he said.
As of Tuesday, the price of dry-season harvest paddy currently stands at 900-950 riel ($0.22-$0.23) per kilogramme in Prey Veng province, and dried paddy at 1,050-1,100 riel, Thom said.
Another rice mill owner in Prey Veng province, who declined to be named, said many Vietnamese traders had come to buy Cambodian paddy following the announcement.
As the influx of Vietnamese traders continues to buoy paddy prices, local traders and rice millers are no longer able to buy from the farmers, he said.
The price of paddy near the Chakrei border checkpoint in the province’s Preah Sdech district rose from 1,070-1,080 riel per kilogramme on Monday to 1,100-1,120 riel on Tuesday, he added.
“No local dealer or rice miller would even think about buying the crop at that price. I haven’t, and I’ll wait and see if the price drops down a bit.
“The price of paddy will drop slightly from April 6 onwards” as the quality of paddy continues to drop following the end of the dry-season harvest, he said.
State-owned Agricultural and Rural Development Bank (ARDB) encourages all companies and rice millers to continue to purchase OM 5451 and IR 85 (504) paddy from farmers at market prices following the ban, it said in a press release on Monday.
ARDB executive director Kao Thach said it has always supported the agricultural sector by disbursing money to rice millers so that they can purchase additional paddy for stock.
“When the government sets a moratorium on exports, the ARDB must work hard to help the government achieve its plan.
“We are currently preparing the bank’s capital for disbursement to helping rice millers buy paddy from farmers,” Thach said.
He said 70-80 per cent of ARDB’s capital is currently allocated to the rice sector.
Last year, the Kingdom exported around 2.15 million tonnes of paddy to Vietnam, Ministry of Agriculture, Forestry and Fisheries data shows.