Wednesday, May 30, 2012

Cambodia Rice: Cambodia Rice Producers, Exporters Form Association

Cambodia Rice Producers, Exporters Form Association

Cambodian rice producers and exporters have formed a new alliance ‘Alliance of Rice Producers and Exporters of Cambodia (ARPEC)’ to promote and facilitate rice exports to other countries.

The ARPEC elected its first executive committee in the presence of a few advisers to the Cambodian government. Registration of the body is expected to take place soon. The deputy secretary of ARPEC said that the alliance seeks to bring together “the major stakeholders in the value chain,” adding, “Now that the officers have been elected to the executive committee, formal registration will take place at the Ministry of the Interior.”

The deputy secretary also revealed that ARPEC has the support of the Thai Rice Exporters Association (TREA) and that it will soon forge a relationship with the Vietnam Food Association (VFA) and China as well to improve collaboration in rice trade between the countries.

Source: Oryza

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Cambodia Rice: Cambodia seeks $200m from China for rice mill

Cambodia seeks $200m from China for rice mill

Cambodian government officials and private sector leaders have met with Chinese officials to negotiate a US$200 million loan for the development of Cambodia’s rice sector, an official said on Tuesday.

Cambodian delegates and investors with ties to the rice sector are now in China negotiating with the Chinese side to get the loan from the Chinese Import-Export Bank, said Son Kun thor, President of the Rural Development Bank.

The new loan would focus on the development of the agricultural sector, primarily the construction of rice-milling factories and improvements of cultivation techniques.

Now surveys are being done to assess where the funds would be best placed, he said.

The $200 million will go entirely to the rice sector but the conditions have not yet been “clearly discussed”.

The final decision rests with the Cambodian and Chinese governments, he said.

The Federation of Cambodian Rice Miller Associations said the federation is working with government officials on this issue and to insure that the loan proceeds, said Phou Puy, president of the federation.

Up to $200 million would be put into the rice sector within reach of Prime Minister Hun Sen’s goal of one million tonnes of rice exported to the global market by 2015, he said.

A memorandum of understanding was signed in early Febuary between Finance and Economy Minister Keat Chhon and Chinese Import-Export Bank President Li Ruogu.

The MoU was signed to aquire a $300 million loan to develop infrastructure and irrigation systems in the Kingdom.

Chinese government loans have so far reached almost $1.82 billion in Cambodia.

The loan will help to develop and improve Cambodia’s agricultural sector, but it is not really enough said Yang Saing Koma, President of CEDAC, an agricultural NGO. Source: PPPost

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Wednesday, May 16, 2012

Cambodia Rice: Thai rice exporter invests in Cambodia

Thai rice exporter invests in Cambodia

Thailand's top rice exporter in 2011 invests in Cambodia: ready-to-eat-meals & processing for export in Cambodia rather than Vietnam.

STC Group, Thailand's biggest rice exporter, has become the latest company to explore rice investment opportunities in Cambodia.

Talks to form a venture with a Cambodian partner, which have started since last year, are likely to be finalised some time this year, an executive said.

"The venture will focus on rice processing, logistics and rice exports from Cambodia," said Wanlop Pichpongsa, deputy managing director of Capital Rice Co, STC Group's rice-exporting flagship.

STC is among several Thai investors seeking to enter the thriving rice industry of Cambodia, whose government has planned to export about one million tonnes over the next few years.

Among the prominent companies are Asia Golden Rice, a leading rice exporter which has announced to pour in 1.5 billion baht to process one million tonnes of rice a year in Cambodia's southern province of Kampot.

Actually, Cambodia's rice industry has strong potential thanks to its naturally rich soil. The country has a number of millers and processing plants but they are not enough

Most paddy is sold to be processed in Vietnam for exports and Mr Wanlop said the joint investment could help Cambodia earn more than exporting the rice in commodity form.

STC has added ready-to-eat varieties in retort pouches to cater to the local market.

The development is seen as a win-win business. While Cambodia still wants expertise in rice processing and marketing, some Thai exporters need to broaden their businesses to minimise risks locally. Thai rice exports are projected to drop sharply this year due to dwindling global demand and uncompetitive prices.

The Thai Rice Exporters Association also said the high paddy price offered under the current rice-pledging programme has eroded the competitiveness of Thai rice.

These factors would push down Thai rice exports this year to only 7 million tonnes, a 30% drop from 10.6 million tonnes shipped in 2011.

"In particular, less demand from Indonesia and Bangladesh is a factor that causes the decline," said Mr Wanlop, also the secretary-general of the association.

Indonesia imported more than 900,000 tonnes of rice from Thailand last year, a 230% jump year-on-year, while Bangladesh bought 736,782 tonnes, up 422% over the levels in 2011.

STC was a major beneficiary of the large orders from the two countries, catapulting it to the top spot in the exporters' rankings in 2011, with a total of 2.02 million tonnes shipped, or 19% of the 10.6 million tonnes the country exported last year.

But such a bonanza is unlikely to repeat his year as production in Indonesia and Bangladesh is rising, resulting in smaller imports, he noted.

The Food Agriculture Organisation forecasts the 2012 world rice output will rise 2.46% from last year to 461.44 million tonnes of paddy. Production from Indonesia and Bangladesh would increase by 5% and 2% to 37 million and 34 million tonnes of paddy respectively.

Consequently, world rice trade this year is expected at 32.8 million tonnes, down from 34.5 million tonnes in 2011.

Whether India would continue to export after completing sales of two million tonnes in the first quarter of this year is a condition that will affect the performance of Thai rice exports, he said.

India offered low selling prices at an average of US$433 a tonne for 5%-grade white rice, compared with $533 a tonne of Thai rice. India's 5%-grade parboiled rice was sold at $450 a tonne, about $100 lower than of the premium grade of Thai parboiled rice.

But there is a chance to see bullish trade in the first half this year, driven by possible large orders from Nigeria, Thailand's biggest rice buyer which bought 1.54 million tonnes of rice in 2011.

According to Mr Wanlop, the Nigerian government will likely increase the levy on rice imports in July, triggering a rush to import the commodity in the first half.

Besides expanding business to neighbouring country, STC has planned to complete the 500-million-baht improvement of its two rice-processing facilities in Ayutthaya and Samut Prakan provinces this year.

The project would enable the group to maintain a 18-19% share in the country's exports. Besides, it will focus more on retail sales by adding ready-to-eat rice products in retort pouches after its fragrant and organic rice products received a good market response, with about 40,000 tonnes in local sales

(Source: Bangkok Post, AGRIBUSINESS, STC ploughs its way into Cambodia, Joint venture to help reduce local risk, 6/02/2012, Walailak Keeratipipatpong, link)

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Cambodia Rice: Cambodia hosts rice forum to discuss ways to raise output,exports

Cambodia hosts rice forum to discuss ways to raise output,exports

PHNOM PENH, April 30 (Xinhua) -- Experts from Cambodia and international organizations gathered here Monday to discuss the current status of rice research and development and to evaluate the country's challenges in rice production and export.

The Cambodian Rice Research Forum was organized by Rice Research Institute(IRRI)and Cambodia's Agriculture Ministry with the support of the Australian government.

"The event created a discussion forum between international scientists with national scientists, development partners and various stakeholders to assess the situation of rice research and production through identification of key challenges facing the Cambodian rice industry and their common solutions to accelerate the country's development of rice sector," Minister of Agriculture Chan Sarun said in his opening remarks.

He said Cambodia's rice output is about 3.2 tons per hectare in 2011, still low compared to 5.3 tons of neighboring Vietnam, 3.5 tons of Laos.

"I am confident that the forum will find inputs to increase rice production in the country," he said.

The forum would offer an opportunity for various stakeholders to exchange views on achieving Cambodia's goal of exporting at least 1 million tons of milled rice in 2015.

Penny Richards, ambassador of Australia to Cambodia, said the forum was an important way of disseminating key findings from existing research as well as prioritizing future research necessary to support the Cambodian government's goal of exporting 1 million tons of milled rice per year by 2015.

Chan Sarun said the country produced some 8.8 million tons of rice last year, and it has about 4 million tons of rice available for exports this year.

In August, 2010, the government adopted a rice export promotion strategy, aiming at raising rice exports to 1 million tons by 2015. However backward post-harvesting technology and lack of capital prevented the country from raising its rice exports.

Cambodia needs some 350 million U.S. dollars to invest in hi- tech post harvest technology and purchase paddy rice from farmers to achieve its target for rice exports. Source: Xinhua (2012)

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Friday, May 4, 2012

Cambodia Rice News: Cambodian rice millers seek to expand trade with EU

Cambodian rice millers seek to expand trade with EU

Cambodian rice millers have pledged to work harder to improve the capacity of their industry as they seek to expand to European Union market. They made the comments at a recent seminar held to discuss findings of the mission they had to five EU countries in September.

“We are determined to make Cambodia become a good partner in supplying rice to the EU market,” Mr. Thon Virak, Director General of Cambodian Green Trade Company, said at a workshop on 1st October.

More than 150 people from government institutions, private sector, and development partners attended the workshop which was held at Ministry of Commerce following a trade mission to Belgium, France, Netherlands, Germany and Poland on 12-24 September. The ministry’s representatives led the delegation of nine rice millers, one representative from a logistics company, one service provider from Small and Medium Industry Association of Cambodia (SMI Cambodia), and four government officials to explore opportunity for rice export to the EU.

The visit aimed to assist Cambodian rice millers in developing trading partnerships and gaining first-hand information about the rice milling technologies, qualities, and standards needed to enter the EU market.

During the visit they met with rice brokers, traders, processors and distributors. They also held talks with the Directorate General of Agriculture of the European Commission and a federation of European rice traders.

“Before the visit, we had not really an idea of what the market requires. Now, after seeing it with our own eyes and talking directly to the buyers, we know what the EU consumers want,” Norng Veasna, a rice miller from Kampong Cham, said.

Cambodia is among the least-developed countries that can benefit from tariff-free imports allowed by the EU under its Everything-but-Arms initiative. The delegation members said there was a strong interest among the European buyers in Cambodian rice. But they also took note of the high requirements on the quality standards of sanitation and food safety of the EU consumers.

“There are good potentials for Cambodian rice to access the EU market, but quality requirements are quite strict. This is the main challenge for our rice producers to address,” said Mr. Renne Outh, Secretary General of SMI Cambodia.

Last year, Cambodia exported 21,600 tons of milled rice to Europe, trailing behind its neighbours Thailand and Viet Nam. To become more competitive in quality and quantity, Cambodia needs to invest more in modernizing processing technology and improve trade facilitation by reducing cost of doing business, officials said at the workshop.

“The core factors for doing business with Europe are high quality of rice, trust and reliability which includes regularity of quantity supply and ability to meet delivery schedule,” Mr. Thon Virak said.

He added that early next year representatives of European buyers will visit Cambodia to sign a contract of 40,000 tonnes of milled rice annually – an amount almost twice as much the total country’s export to Europe in 2009.

The rice miller mission was proposed by the Trade Promotion Department (TPD) of MoC and prepared in close cooperation with the Rice Task Team under the Trade Sector-Wide Approach (Trade SWAp). Development partners Agence Francaise Developpement (AFD) and UNDP provided funding for the mission. Technical assistance before and during the visit to Europe was provided by German Technical Cooperation (GTZ).

Speaking on behalf of UNDP, Ms. Norng Ratana, a programme analyst on trade, said the harmonization among donors and public and private sectors is necessary to forge strategy for doing rice business with the EU.

“We can develop a good plan and set target to increase rice export, but without involvement of the private sector, it will be very difficult to implement such a plan. Private sector can be the producers, collectors, and distributors. They can also serve as the link between the buyers and farmers,” she said at the workshop.

Source: UN/12-October-2010

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Cambodia Rice News: Cambodia Rice Exports to Grow Over 100% in 2012 Amid Chinese Demand

Cambodia Rice Exports to Grow Over 100% in 2012 Amid Chinese Demand

Cambodian agriculture officials have revealed that the country’s rice exports are expected to grow over 100% to 400,000 tons in 2012, with Chinese demand for rice helping the nation compensate for the slow start in the first quarter of this year amid falling regional prices.

Cambodia’s Minister of Agriculture, Forestry and Fisheries said that tax waivers by Europe would continue to help the country’s rice exports. He said that while Europe would remain the biggest rice market for Cambodia, China’s unexpected need for rice this year would help the country recover from a slump in first quarter exports.

Last year, Cambodia exported about 173,000 tons of rice mainly due to import tax waivers by Europe. China is expected to become a top rice importer in 2012 with over 2 million tons of rice imports.

The Cambodian Agriculture minister declined to share figures for the first quarter 2012 exports, but acknowledged that there were few export orders in the first quarter, as prices from international competitors remained low. However, the chief of a Cambodia private rice exporting company revealed that the country shipped about 37,000 tons of rice in the first quarter 2012, about 12,000 tons more than the 25,784 tons ice exports during the same period in 2011.

Earlier this month, the first direct test shipment of rice from Cambodia reached Chinese shores, but failed to qualify China’s standards, not due to the quality of Cambodian rice but because of a glitch in paper work, according to Cambodian sources. The export company chief said, “It’s not a problem with the quality of Cambodia’s rice…There’s something missing between the political level and technical level for the shipment.”

“Cambodian rice will flood the Chinese market,” he added. Source: Oryza/10-Apr-2012

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Thursday, May 3, 2012

Cambodia Rice News: New rice sector association formed

New rice sector association formed

A new rice export institution is in the process of being formed in an effort to coordinate rice growers, millers and exporters called Alliance of Rice Producers and Exporters of Cambodia (ARPEC).

According to one of the founders, David Van of Mekong Oryza, ARPEC is the clustering concept that is being initiated with diverse membership including nine provincial rice millers’ associations across the country, some individual mills, one logistics firm, one Micro Finance Institution and some other business people including fertilizers distributors.

Another founder is Van’s associate, Hun Lak of rice conglomerate Mekong Oryza. They hope to break down barriers among others in the field and create the conditions of common purpose to rally behind the government’s effort so that Prime Minister Hun Sen’s goal of a million tons of Cambodian exports can be realized in 2015.

Existing similar associations include the Federation of Rice Mill Associations and the Rice Exporters Association. But Cambodia lacks a more professional rice entity to be able to cluster and ensure big tonnage ability to commit with international buyers on more serious tonnage shipment, according to Van.

“ARPEC would also be in a position to provide small financing facilities to its member for a start and hopes to expand the volume of such facility as the institution matures.”

Van, who serves as Business Development Director at Mekong Oryza says the winning concept includes all aspects of the value chain, from “Seed to Shelf” or S2S.

Mekong Oryza Managing Director Hun Lak, who just returned from a visit to Taiwan to see their high tech rice growing operations, says Taiwan rice technology is high tech and high yield.

“The only concern we have is whether the seeds in Taiwan are adaptable to the climate here, so the only way is to have a nursery with a pilot project and find out,” Hun said.

Where to invest in the rice sector depends on which segment of the value chain you choose, from seedling down to farming techniques, milling process and logistics flow, Van said.

“That’s why it comes down to working capital, (i.e. cash flow).A hundred million dollar investment is not just equipment. If you invest in a rice mill, it has to do with cash flow so that you can procure consistent paddy (unmilled rice) to run your mill.”

One of the problems Cambodia faces in meeting the Prime Minister’s goal of a million tons of rice exported in 2015 is that an estimate of upwards of 50 per cent of Cambodia’s rice crop is milled in adjacent Thailand and Vietnam, giving those countries the value-added benefits for their own mils.

Van says a minimum of $1.03 billion is necessary to keep the surplus of paddy of 4.5 million tons in Cambodia.

“Trade finance is all about obtaining facilities. In Cambodia, the banks are still learning the process and it is coming up gradually.The bank wants to lend you the money but they will want to know how profitable your company is.”

But the problem is that most of Cambodia’s business people are small and medium sized businesses which are not accustomed to bookkeeping.

“If the bank does not have the tools to assess you, how do they lend you the money? They can show some flexibility, but at the end of the day, it is how they are able to assess the majority of the companies.” It boils down to basic corporate management.

That’s why Van advocates a multi-tier approach.

“You cannot solve the problem in one go. You need a gradual, step-by-step approach,” he said.

Another investment potential in the rice value chain is logistics, according to Van.

Last year, Mekong Oryza shipped out just less than 6,000 tons of long grain white rice, mainly to Russia, with barges down the Mekong River to Ho Chi Minh City and there to the European ports. Some of the rice went to Sihanoukville by container.

“Normally when you close a deal, there’s a contract, a sales agreement. The buyer will either give you a down payment or open a Letter of Credit (LC). With the LC you go to the bank try to negotiate some kind of facilities. Some banks will lend to you 60 to 70 per cent of LC value, depending on your relationship with your banker, which you can use to purchase the paddy,” Van said.

“We are already a rice export company, but what we want to do is vertical integration, from seedling to milling, and eventually to export warehousing.Right now we have some cash, but that would not be sufficient if we want to implement the entire strategy. Now is the two track approach. One is to start commissioning expertise to put up nurseries, silos and mills. The second track is to look for joint venture partners,” Van said.

Managing Director Hun Lak said they will start a pilot project for rice seedlings in May and the company is scouting for an appropriate location. At the moment we are reviewing places like Kampong Thom and Prey Veng provinces but we will decide on the final location soon.

Mekong Oryza is also building a rice processing unit this year on Road 51 in Udong to be used as a consolidation facility between the railroad and the waterways.

Some of the other bigger rice millers in Cambodia include Men Sarun, which supplies the Cambodian army and the domestic market, the Baitang Company and the Loran Company in Battambong.

Van said that in Thailand the government provides the pure seeds for the rice farmers, something that Cambodia ought to look into but is facing necessary capital in this respect.

“The whole chain of the rice business must be from the pure seeds.”

The 1st generation of seed would provide you the best yield which goes down as you use subsequent 2nd generation, 3rd generation and so forth.

An organization involved in the development of rice seeds is called CARDI, the Cambodian Agricultural Research and Development Institute, located on National Road 3.

“They can’t cope with the demand. They only supply at maximum 20 to 30 per cent of the domestic supply required, and only 2nd or 3rd generation seeds” Van said. The miller goes and bids for the seeds and gives it to the farmer on a contract agreement whom has to sell back the output to the miller at prevailing market rate,” Van said.

Two big rice projects now under way are a $100 million investment for a rice mill located inside Sihanoukville Port, a J/V between a local conglomerate group and a Chinese provincial investment entity from Yunnan and a similar size Thai –Khmer J/V investment with Asia Golden Rice from Thailand, located in Kampot.

“By 2013, these two mills will be up and running. There are a lot of investments, whether they are foreign or locals setting up big capacity mills in Cambodia. All these mills will be up and running by the end of this year, and early next year,” Van said.

“When you look at the amount invested into that sort of mill, $100 million, it does not go all into the equipment. Setting up a mill takes only 20 to 30 million. The rest is about working capital to purchase the paddy rice,” he said.

“If you do not have the capital to buy the paddy you cannot achieve consistency in output, i.e. the milled rice.”

Van said that on some derived products from a first run of milled rice, at the moment these products command a more premium price in the domestic market than the export market.

“That’s why so many people don’t export. Selling into the domestic market enables quick cash and lesser headaches and cost in export documentation and stringent quality inspection to meet export standard.

“With all these big capacity mills comes another challenge which is consistency in paddy procurement. When we talk about paddy procurement, then comes another potential business which is the silo.Silo means you get the wet paddy, dry it, and store it in the silo, and wait until the market price is right and then just sell it to the rice mill. A full rice mill will also normally include a silo. You can also go into the silo business without owning a mill,” Van said. Source: PPPost/27-Apr-2012

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Tuesday, May 1, 2012

Cambodia Rice: World Rice News: 'No more rice imports in 2013'

'No more rice imports in 2013'

ZAMBOANGA CITY, Philippines – The Philippines will no longer import rice in 2013 because it has already reached sufficient production of the food staple, according to Agriculture Secretary Proceso Alcala.

Alcala said the country will be on trial export of a variety of rice early next year and the first target will be in the Middle East.

He said the country used to require 21-million metric tons of palay and the rice production from 2012 to 2013 will reach 20.4 million metric tons, which will reduce the need for imports to 500 metric tons.

He said the difference was very slim and if not for the recent typhoons that hit the rice producing areas in Luzon, the deficit would have already been wiped out.

“We have reached enough production of rice. We are on the right track in submitting the food staple sufficiency,” Alcala told newsmen here over the weekend.

The agriculture secretary added that what is being imported are just buffer stock.

“Early next year we will start trial export variety of rice with the bilateral agreement with Qatar,” he said, adding that they are now in the process of expanding the production of ‘basmate’ rice, a long grain variety said to be a favorite in the Middle East.

Alcala said they will maximize rice production and were checking on island municipalities to develop the potentials.

Source: Philstar

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