PHNOM PENH: Cambodia'S rice industry is losing out to cheaper rice from neighbouring countries such as Vietnam and Thailand.
The two countries are now supplying white rice to the world market at much cheaper prices than Cambodia, which exports more premium or fragrant rice varieties.
Agriculture Minister Veng Sakhon has urged exporters to focus more on white rice exports to tap the global low-cost market.
"We are busy focusing only on premium fragrant rice and forgot about Vietnam, which is filling the international market demand for white rice. So we should turn to processing more white rice for export," he said, adding that by continuing to focus on premium fragrant rice for a niche market, it would keep Cambodia out of the world's rice-producing countries and may leave farmers lagging behind.
A Khmer Times report said that Cambodia produces more than 10 million tonnes of padi a year and only about three million tonnes are premium fragrant padi.
According to figures from the ministry, as of September, padi cultivation was carried out on 2.7 million ha nationwide.
Lun Yeng, Secretary-General of the Cambodia Rice Federation (CRF), said the problem with the markets needed to be addressed.
He said if they wanted to process white rice for export, they have to do it at prices that could compete with neighbouring countries in the international market.
"We cannot produce on a large scale with high cost and sell at a low price. We already know that the recurring challenges today are high production costs and transporting costs."
Yeng said Vietnam's production and transportation costs were low, with white rice being loaded directly into vessels as bulk cargo.
"We really want to do it, but it is not profitable. Our production cost is already high, so we cannot sell at low prices."
Cambodia exported 488,775 tonnes of milled rice in the first nine months of this year, up 22.6 per cent compared to the same period last year.
This paled in comparison to Thailand which exported 2.89 million tonnes in the first half of ths year, a drop of 34 per cent year on year, while Vietnam exported 3.5 million tonnes, an increase of 5.6 per cent.
Cambodia expects to export more than 800,000 tonnes of milled rice this year and reach the one million tonne target by 2022.
Yeng said Cambodia also exported 30 per cent of its white rice, most of which was to the European Union market.
However, he said since the European Commission imposed safeguard measures on Cambodian rice, it could not compete in the European market.
"Therefore, fragrant rice is still our strength in the market. We do not focus on quantity. The important thing is that we can produce with profitability and ensure the well-being of the rice sector,"
He said Cambodia had 70 rice exporters nationwide, 60 of whom are members of CRF.
He said there were 120 rice mills processing padi for export which could process a total of 1.2 million tonnes per year.