MOC Meeting on Purchase of Rice for Export to Foreign Markets

By on September 16, 2016

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On September 16, 2016, Ministry of Commerce organized a meeting under the chairmanship of H.E. PAN Sorasak, Minister of Commerce, with participation from H.E. Son Kunthor, Minister Delegate to the Prime Minister, H.E. Sok Puthyvuth, President of Cambodia Rice Federation and participants from Rice Mill Association, farmer cooperatives and financial institutions.

This meeting aimed at finding solutions to the recent price drop for rice and to enable the export of Cambodian rice to foreign markets. After active discussion, a number of challenges were found including:
1) Factors beyond control such as unforeseen weather changes attributing to the late harvesting of crops which generally are harvested and sold by the end of the August. In addition, there are lack of storage and drying facilities especially since rice is perishable crop that cannot be stored beyond three months.
2) Both the farmers and the rice millers are short of cashflow as some costs are reserved to repay loans and interests.
3) With Pchum Ben approaching, there might be suspension on buying activities.
4) High electricity and added costs as well as unofficial payments leading to high cost of Cambodian rice if compared to neighboring countries. These problems are also contributing to the suspension of operation of a number of rice millers due to low profit margin.
5) Cambodian and countries who agreed to import Cambodian rice such as China, Indonesia and Timor Leste have yet to sign official documents.

The following solutions were discussed to mitigate the challenges above:
1) Ministry of Commerce will urgently work with representatives of importing countries to speed up the signing of memorandum of understanding (MOU) between the governments in order to officially open the markets and to allow the buyers and the sellers to make appropriate trade arrangement.
2) Ministry of Economic and Finance and Rural Development Bank will discuss on the cashflow issue.
3) Ministry of Commerce has already informed rice millers and traders, through Provincial Department of Commerce, the export potential of Cambodian rice to foreign markets to encourage them to purchase rice from the farmers.
4) Regarding high cost of electricity, added costs and unofficial fees and other issues, Ministry of Commerce will report to Samdech Prime Minister to seek cooperation with other agencies to timely solve these problems.

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