Tuesday, October 20, 2015


It's funny how relevant issues are not receiving the importance they deserve. One such issue are the new trade deals drawn up by the USA.

Relevant for the region is the Trans-Pacific Partnership (TPP) trade initiative which has recently been concluded; a new trade deal between 12 Pacific Rim countries. Regional signatories in this are Vietnam and Malaysia.

Problems are that it's not (yet?) clear what has been achieved (discussions were secret), though it seems to be a win for big corporations. This may well pave the way for hybrid rice production and trade to increase. 

For non-hybrid rice trade, it's expected that Vietnam will gain more favourable access to the U.S., while Japan manages to keep imports largely at bay albeit for some token imports.

Cambodia is not part of the TPP, though may well be affected especially where it comes to competing with Vietnam. The Phnom Penh Post (Oct. 7) looks at possible developments:
'Some exporters of Cambodia’s biggest agricultural crop also voiced concern over the new trade pact, suggesting it would limit their expansion into the US market.
Song Saran, CEO of Amru Rice, one of the Kingdom’s largest rice exporters, said Cambodian rice accounted for about 2 to 3 per cent of the US market last year. He said that while this represents only a small share of the market, the TPP would restrict any future growth.
“We are not affected by the signing of the TPP, as rice exports to the US are not big as compared to garments,” said Saran. “But it will be challenging to expand our market share in the US.”
Though there seems to be a slight hiccup, rice exports from Cambodia are on the up. Phnom Penh Post (Oct. 2):
'Rice exports fell sharply last month, but the Kingdom’s most important crop is expected to recover and end the year in positive territory.
However, September’s dip should have minimal impact on the Kingdom’s annual export tally, according to the UN’s Food and Agriculture Organisation (FAO). Direct milled rice exports between January and August were about 340,000 tonnes, nearly 50 per cent up compared to the same period a year earlier, it noted'.
Noted is that Cambodia is becoming more and more dependent on European and Chinese imports, areas where the Vietnamese have less bargaining value.
Cambodia Daily (Oct. 2) sees that the Cambodian rice players hope to exclude national cheaters from exporting: 
'The Cambodia Rice Federation (CRF) on Wednesday announced strict penalties for exporters who mix Cambodian rice with low-quality rice from other countries after receiving complaints that some exporters have been using the method to increase profits'.
It still seems that exploring rice niches may well be the way forward. Khmer Times (Sep. 30):
'Domestic rice millers are preparing to compete against their Thai rivals for a share of the US market as the European Union market becomes increasingly competitive, they say.
The move, which will see the Kingdom’s premium rice competing with Thai jasmine rice, which dominates rice imports by the US, is part of an overall strategy to diversify export markets, rice exporters say.  
Economist Srey Chanthy agreed that domestic rice millers will face immense challenges competing with Thai rice in the US market. It is “very difficult to compete with Thailand,” he said. “Maybe Cambodian [exporters] should capture a niche market, like organic rice, or conduct aggressive marketing campaigns and target Cambodian communities as a start,” he said'.
Vietnam seems this years loser when it comes to rice exports. Concerning having (or not) an edge on their competitors,  Vietnamnet (Sep. 21) interviews Dr. Nguyen Do Anh Tuan, Director of the Vietnam Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD):
'To compete amid rice oversupply and consumers preferring to use high-quality rice, the [Vietnamese] rice sector must improve the quality of rice to participate in niche markets which are small but have high value'.
From Thailand the quirky news is that rice farmers should move along. The Nation (Oct. 5):
'The government has called on farmers across the country to grow plants that require less water than rice amid the ongoing risk of drought.
... after rice farmers in Kanchanaburi expressed dissatisfaction over the government's plea that they avoid growing rice outside the rainy season'. 
The same source on the same day also has this article which starts off as follows:
'[Thai] Farmers are growing a dry season rice crop - despite authorities' warnings - and have urged the government to come up with concrete policies to help rice growers during the dry season. 
As the dry season approaches, the Royal Irrigation Department (RID) has warned farmers in the Chao Phraya River Basin not to plant the dry season rice crop. They say the available water in the four major dams is not enough for agriculture. Officials suggest farmers cultivate fewer water-consuming plants - or change jobs and become labourers.
"We are told to change jobs - to be workers or otherwise plant corn, vegetables or beans instead. This hurt my feelings so much. We are farmers - and furthermore, vegetables do not sell well and are cheap," she [Wassana Gromtu, a farmer from Phitsanulok's Bang Rakam district] said'. 
The Nation (Oct. 2) continues:
'Agriculture and Cooperatives Ministry permanent secretary Theerapat Prayunrasiddhi said the ministry had ordered the Royal Irrigation Department (RID) to inform farmers in the Chao Phraya River Basin about the water situation in order to encourage them not to grow the dry-season rice crop.
"During a drought, we see that 80 per cent of farmers outside the irrigation area can adjust well to the situation because they are familiar with water shortages and can change their production pattern, unlike those in the irrigation areas who are used to easy access to water," Wiwat [
Wiwat Salyakamthorn, Agri-Nature Foundation president] said. He concluded that the farmers needed to help themselves during drought, as the government cannot provide help to everyone. He urged them to learn mixed farming and have their own water reservoir on their land'.
The UN's FAO suggests a slight decrease in this years rice output in Cambodia (FAO, Sep. 23):
'FAO currently anticipates the 2015 main season rice production to fall by 3 percent to 7 million tonnes. Assuming more normal growing conditions for the latter half of the ongoing main season and larger sowings for the forthcoming 2015/16 dry season which may partially compensate for the losses incurred by the earlier dry weather, the 2015 aggregate rice production is forecast at 9.18 million tonnes. This is 2 percent down from last year’s bumper crop and slightly above the five-year average'.
Stratfor Global Intelligence (Sep. 23) looks at China's rice market as seen from the US perspective. 
One aspect they concentrate on is how China's food security strategy is maturing, which may enable more imports. On the other hand they note how the US agriculture's dependence on GM strategies is increasing. This in turn raises the likelihood of GM strains turning up in exports thus possibly affecting these. As China has done so in the past.
'Considering the resource scarcity much of the world will face in the coming years and decades, genetic engineering is poised to be a growing part of agricultural strategy, and so contamination will only become more likely. Even though there is already domestic development of genetically modified strains of rice, Beijing is likely to be extremely cautious about accepting foreign genetically modified crops, especially for staples like rice. Furthermore, as Beijing seeks to build up its own agricultural biotech sector as part of its food security strategy, we could see regulations shift accordingly'.
Phnom Penh Post (Sep. 30) has an article on how pepper grown in and around Kampot is gaining better markets at better prices due to good quality control.
'A report released by UNCTAD this week showed that “prices for Kampot pepper had increased significantly after producers gained access to wider and more diversified markets as a result of GI certification”.
In one case study, Kampot pepper producer Starling Farm saw the farmgate price of its product increase from $5 per kilogram before GI status in 2010 to about $18 in 2014'.
Meanwhile Thai rubber farmers want more (Bangkok Post, Oct. 15). In short, a minimum  price, the ability to swap rubber for rice with the government, a review of forest policies vìs-a-vìs rubber plantations on demarcated forest lands and landless rubber farmers and tappers should have the ability to register with the government.

Other news which might have a slight touch to rice trade comes from the Phnom Penh Post (Sep. 25):
'The ministry of Agriculture plans to establish five regional food safety inspection offices near the country’s borders to facilitate the flow of cross-border agricultural trade, reducing the time it takes Cambodian exporters to deliver shipments of agricultural products to foreign markets, a ministry official has said'.
Oddly imports don't face the same requirements. 

Tuesday, September 22, 2015

Safety first

Cambodia should go ahead and allow GMO to be grown. So captions the Khmer Times (Sep. 8). It is a strange and let's say awkward article. 
The article is authored by Gabrielle Ward and John Humphreys both of the Professional Research Institute for Management and Economics (PRIME). Apparently a newcomer on the scene, the institute announces itself as:
'The Professional Research Institute for Management and Economics (PRIME) is an independent teaching and research institute that operates in Phnom Penh (Cambodia) and produces research reports, opinion polling, translation, commentary, events, and short courses on a range of topics'.
Their opinions that they want to share with us concerning GMO legislation in Cambodia:
'Unfortunately, despite growing food production, poverty and malnutrition persist among the rural population. One solution is the use of GMO crops, which have the potential to further boost food production. But, international pressure, scaremongering, and limited capital for investment, prevent the uptake of GMO crops in Cambodia. This holds back potential rice yields of farmers and the efficiency of production.
The health and safety of GMOs has been extensively studied. In polls of scientists about the public safety of genetically modified foods, an overwhelming majority insist that GMOs are safe for human consumption. Most food consumed in OECD countries such as the United States and Australia is genetically modified.
There will inevitably remain a demand for non-GMO rice, especially for export, but that doesn’t justify the introduction of new regulation. The technology to increase production and lower food prices already exists, and it is incumbant on the Cambodian government to allow the industry to explore all new opportunities -- including GMO -- without the burden of government restrictions. Pandering to misguided and ill-informed anti-GMO protesters will hurt the Cambodian agriculture industry and punish the poorest 15 percent of Cambodia who continue to suffer from malnutrition'.   
Unfortunately the authors seem to be drawing lines between unrelated dots.
Introduction of GMO's has no impact (negative nor positive) on poverty and / or malnutrition among the rural poor. 
Rice yields can be easily boosted by higher prices, not by introducing GMO's.
Cambodia's rice industry is increasingly being dominated by being a niche player in rice with it's jasmine rice increasingly being sought after. 
Most food consumed has GMO's in OECD countries? Not so in Japan / Korea and Europe. 
Doing away with any regulation in the food industry is like opening up Pandora's box, once liberated there's no way of stepping back. 

No big export deals for Cambodia (Phnom Penh Post, Sep. 10) in the wanting, that's if the government can't make exports any cheaper ...:
'The Philippines’ National Food Authority (NFA) yesterday authorised the import of 750,000 tonnes of rice and has invited the governments of Cambodia, Thailand and Vietnam to join the bidding process to fill the quota, according to a report from Reuters.
But having already lost out twice in the past 12 months, Heang Vutha, director general of Green Trade, said the new tender, which has set a closing date on bids of September 17, is too soon to expect costs to have come down to the point where Cambodia can compete.
However, Song Saran, CEO of Amru Rice Company, said that Cambodia could still be competitive in the bidding process if the government was willing to share in some loses and offer incentives to private exporters, through tax cuts, low-interest loans, lower electricity fees or transportation cost reduction.
“It is a good opportunity for Cambodia to open the market there again, to show about our quality rice” he said'.
The Cambodian situation of growing many different rice varieties makes branding difficult, (Phnom Penh Post, Sep. 2): 
'The Agriculture Ministry and the Cambodia Rice Federation (CRF) are at odds over the branding of Cambodia’s premium jasmine rice that would help differentiate it from similar varieties sold by Thailand.
The CRF is working on a new brand name that it hopes will help distinguish Cambodian rice in the international market.
The national rice body wants to bring all varieties of jasmine rice under an umbrella brand name that it plans to announce at the Cambodia Rice Forum in November.
“We have set up the market promotion executive committee for naming the quality rice as the trademark, because so far our rice is just known as fragrant rice, because we do not have a specific name,” the CRF’s acting secretary-general Moul Sarith said.
Sarith said that inconsistent labelling of Cambodian rice among exporters was diminishing the collective strength of the rice sector.
Cambodia’s jasmine rice can be grown from multiple varieties of seeds, including Phka Romdeng, Phka Romeat, and the Kingdom’s distinguished variety, Phka Rumduol – a long-grain, aromatic type of rice and named after Cambodia’s national flower.
Phka Rumduol rice variety has been awarded the world’s best rice at the last three annual World Rice Conferences.
But the Ministry of Agriculture has already zeroed in on “Cambodia Jasmine Phka Rumduol” as the sole brand name for Cambodian rice.
“I would like to urge all rice exporters to use this name from now on,” said Hean Vanhorn, deputy director general at the General Department for Agriculture at the ministry.
“I know some rice exporters do not dare to use this name, but we need to change that.”
However, selecting a brand name based only on one variety of fragrant rice would confuse buyers, said Song Saran, CEO of Amru Rice and CRF member.
He added that when buyers would test the rice they would expect it to be Phka Rumduol, but in actuality it could be either of the other varieties used in Cambodian farming'.
The Khmer Times (Sep. 18) notes that exports of rice are up by just under 50% so far this year.

Phnom Penh Post (Sep. 4) notes that millers are asking for tax exemption:
'As Cambodia continues to struggle with its cost competitiveness in the rice sector, rice millers and exporters met with the General Department of Taxation on Wednesday asking for an exemption from paying the 10 per cent value added tax (VAT), saying that it will help ease prices in the sector'.
An article in the Phnom Penh Post (Sep. 12) discusses how the rise of Burma's economy may well spell problems for Cambodia as it seems Burma has more ability to offer lower prices for it's produce as well as better logistics.

Then in a more or less related issue, facing opposition from mostly Italian farmers, the EU's commissar for Trade defends the deals for zero duty from amongst others Cambodia and Burma (Oryza, Sep 1). 
And though the assurance went some way to addressing Italian concerns farmers groups still note that the exemption stimulates unfair competition and that the profits fall to multinationals rather than poorer farmers. But maybe it was intended to stimulate their economies ...?

With prices determining rural development outcome, the prices for export of rice are continuing their downwards trend (Oryza, Sep. 3) despite USDA predicting lower production and year on year amounts of rice stocks declining by more than 10% on an annual basis in their recent Rice Outlook.

More rice news, this time from the wider region.

More needs for focusing on niche markets for rice as this article from Vietnamnet (Sep. 11) shows:
'For Vietnamese rice, the situation is not better. Nguyen Duc Thanh, Director of the Institute for the Vietnam Economic Research and Policy (VERP), said the rice market of Vietnam is increasingly dependent on China.
Vietnam is losing its traditional markets. Meanwhile, Thailand is diversifying the market with quality products so it takes footsteps in every market, from picky ones like the US, Japan, Europe, and China to less choosy markets like Africa.
"The problems of the Vietnamese rice market are: difficulty seeking markets for high quality rice; unable to build rice brands for Vietnam; rice price in the domestic market dependent on export prices; and lack of cooperation among local rice traders and exporters,” Thanh said.
Professor Vo Tong Xuan, a senior expert in agriculture, said that while Vietnam’s rice exports fell in both volume and value, Cambodia's rice exports in the last eight months of 2015 increased by 50% compared to the same period of 2014. Cambodian rice is exported to picky markets like China, France and some European countries.
To promote its rice, Cambodia launched a large-scale marketing program. It participated in all international rice fairs held in Thailand while Vietnam was absent. They not only brought rice samples for customers to see and taste but also offered a price and signed contracts on the spot'.
Funny how they actually are envious of Cambodia. 

Continuing on this subject, Vietnamnet (Sep. 16) looks at the problems of it's domestic exporters and hopes to see a solution for this quandary:
'According to data from the World Food Organization (FAO) in 2015, the export prices of Pakistan’s Basmati rice and Thailand’s jasmine rice were above $1,000 per ton in 2012-2015.  At the same time, 5% broken rice of Vietnam has never reached the price of $500/ton'.
'Therefore, the problem of building a Vietnamese rice brand is more urgent than ever'.
So more branding needs?

Meanwhile in Thailand ...
Desperate times require desperate measures? With lower than hoped for rains, Thailand has actually banned growing rice, so reports the Bangkok Post (Sep. 12).
'Ministries in charge of government projects must also be instructed to hire farmers so they have some income.
The ban means rice farmers would not be able to grow rice for most of the 2015 crop year.
This involves 870,000 rai that have not been farmed and the 15 million rai on which planting will be banned'.
The ban would come into place after November 1 so adds the Nation (Sep. 14), thus not affecting current plantings.
The practice (Nation, Sep. 17): 
'According to an informed source, the Agriculture Ministry was planning to ask the Cabinet to close down water gates and pump stations across the country to stop farmers from pumping water into their farms as soon as the dry season started on November 1'.
The above precedes to what Bangkok Post (Aug. 30) names a call to arms, but that seems to be farmers debt:
'Farmers’ debts have become so severe and chronic that every government in recent memory has been forced to make it a priority.
... farmers are often left not only at the mercy of the rain, or lack of it, but also at the whims of loan sharks.
Farmers might be happy to see a higher rice price, albeit unrealistically, but the scheme was a double-edged sword because it encouraged farmers to increase the quantity while placing a lower priority on the quality of their rice'.
Their answers: education, formation of cooperatives, creation of value addition and fairer input systems. Will it happen?

A more scientific report on Indonesia's agriculture from the New Mandala website (Sep. 1). It notes that oil palm plantations are not really paying off in terms of rural development.
'Food policy is about much more than growing rice: it requires helping the poor access food'. the article looks in depth at how the policies encouraging large scale oil plantations are actually effecting poorer farmers negatively.
Plantations are yet to offer a pathway out of poverty on their own, and new programs need to help poor farmers upgrade into oil palm or other profitable crops.
Enabling vulnerable farmers stuck in rural poverty to use their own land more effectively continues to be critical.  Land may offer an essential safety net when no other is available – until effective social safety nets are rolled out and farmers can find well paid off farm work.
Food insecurity at the household level poses prickly land and livelihood dilemmas. Determined efforts to understand and to address such local dilemmas will provide hope to Indonesia’s rural poor'.
One reason why developing palm oil plantations is not paying off is the price of palm oil. These are in the doldrums. In Thailand (Bangkok Post, Sep. 15) notes that farmers want a fair price: one that meets their costs. The call came in response to the government lowering their intervention price as it was leading to an oversupply encouraging smuggling.

Other opportunities? One of those opportunities may well be sugar to China (Bangkok Post, Sep. 3), at least in the near future:
'Dry weather and a decline in sugarcane planting means China next season will produce its least amount of sweetener in a decade'.
And though prices are at a low at the moment the prospect is for more Thai sugar to hit the Chinese market at much better prices.

Friday, August 21, 2015


With drought conditions disappearing (and thus discussions on potential insurance), the focus of the regional rice industry is now well and truly on coping with floods. 

Burma, so notes the Bangkok Post (Aug. 14), will  discontinue exports of rice so as ensure domestic prices will remain affordable:
'Myanmar halted rice shipments after floods over the past month inundated farmland, raising the specter of supply disruptions in the sixth-biggest exporter.
Declining supply from Myanmar may help boost global rice prices by about $10 a tonne, said Kiattisak Kanlayasirivat, a Bangkok-based director at Ascend Commodities SA, which trades about 500,000 tonnes of rice annually. Any impact may be limited as other exporters such as Thailand can fill the market, said Samarendu Mohanty, head of the social sciences division at the Los Banos, Philippine-based International Rice Research Institute.
Thai 5% broken white rice, a regional benchmark, has dropped 9.8% this year to $377 a tonne'.
If anything the past has learnt that knee-jerk reactions to weather conditions is not the way to go. How come the Burmese government failed to take measures to store rice when the going was good?

The Vientiane Times (Aug. 17) notes that recent flooding will have some impact on harvests. And suggests the same measures as in Burma. Vientiane Times (Aug. 14) :
'Lao economists have warned the relevant sectors of the government to prepare measures for augmenting the rice supply next year after farmers around the country have been badly affected by drought and then flooding during this wet season.
The late arrival of the rains this year forced some farmers, especially those without access to irrigation systems, to delay the planting of their rice crop and this was followed by thousands of hectares of planted rice being destroyed by flooding from the frequent heavy rains in the last few weeks.
This could lead to a shortage of rice in the country next year and a rise in pricing, a senior economist from the National Economic Research Institute, Dr Leeber Leebouapao, has said.
The cost of rice in Vientiane markets is currently showing a slight rise of 2-3 percent over normal levels the Vientiane Foodstuff state enterprise Director, Mr Khamla Saengdara, told Vientiane Times yesterday.
The current rice price is around 70,000-90,000 kip per 12 kg bag, which is considered a stable price.
“We still have a surplus of rice for consumption and sufficient to supply market demand for the present because a lot of farmers have stored their paddy rice after harvesting last time,” he said.
Different rice traders are also bringing polished rice for sale after they bought it for stockpiling when the price was low at the beginning of the year.
Mr Khamla commented that he would be happy if a price increase meant that the farmers benefited because that would help to promote more rice growing but the main beneficiaries are the middlemen or rice traders who take any opportunity to raise pricing by themselves when there is a shortage of supply'.
It's not often that this insight is voiced ...

In Cambodia the impact of flooding on potential rice harvests is yet to be assessed. The Phnom Penh Post (Aug. 6):
'On Tuesday, the Ministry of Water Resources and Meteorology called on several provinces, including Stung Treng, Kratie and Kampong Cham, to harvest crops quickly as increased rainfall causes levels to rise dangerously high along many of the country’s main waterways'.
The national positives are that exports from Cambodia are way up. The Khmer Times (Aug. 8):
'For the first seven months of 2015, Cambodia has exported some 312,317 tons of milled rice to international markets, up 53.1 percent if compared with the same period last year, pointed out a report of the Secretariat of One Window Service for Rice Export Formality'.
Then some cash is thrown at the problems. Cambodian Daily (Jul. 28):
'The Cambodian Rice Federation (CRF) signed a memorandum of understanding with the Ministry of Commerce on Thursday to receive $450,000 in financial support from the government to increase Cambodia’s rice exports, according to a federation official'.
The negatives are that not all what's planned is not going as expected. The Phnom Penh Post (Jul. 29):
'A project to build 10 warehouses to store rice paddy using Chinese funding has hit a roadblock, as the Cambodian government has been unable to meet criteria set by the Chinese for the project, according to an official associated with the project'.
And more bad news from China. Khmer Times (Aug. 13):
'Cambodia’s need to secure China as a rice export destination is becoming increasingly urgent, with China’s multiple pending agreements with other countries in Southeast and South Asia, said industry insider David Van. 
China recently signed a deal with Thailand for 1 million tons of rice, with another million in a pending agreement before the end of the year, according to Mr. Van, a senior advisor with the Bower Group. He added China would also sign a deal with Laos for 300,000 tons. It also plans to import more non-Basmati rice from India. 
“We have tougher competition for the China market,” Mr. Van told Khmer Times. “As the Chinese vice president stated candidly earlier this year at the last China-GMS meeting, Cambodian rice is too expensive and still relatively ‘unknown.’”
And finally the EU are dealing trade issues with Vietnam. Possible outcome may be that EU entry for Vietnamese rice will become easier. This may well mean bad news for Cambodia. The Phnom Penh Post (Jul. 27):
'Under the proposed EU-Vietnam Bilateral Free Trade Agreement (EU-V BFTA), the EU may import around 76,000 tonnes of rice, mostly husked and milled, from Vietnam at zero per cent duty, according to Oryza, an industry publication.
Currently, the European Union (EU) imports rice and other products duty-free from least developed countries under the Everything But Arms policy.
Of the rice exports to the EU under this policy, Cambodia accounts for 22 per cent and Myanmar three per cent.
If Cambodia needs to maintain or increase the 250,000 tonnes its exports to the EU, Saran [president of Amru Rice] said it will have to improve its production capacity and logistical services to remain competitive.
Independent economist Srey Chanthy said that despite tough competition from Vietnam, Cambodia could increase focus on the niche market of fragrant rice – a variety that is not grown in Vietnam currently'.
Despite in the past having undertaken thorough inspections of the various standards of the rice pledging scheme of the previous Thai government, an upcoming auction of sub-standard rice (The Nation, Jul. 27) was annulled:
'Commerce Ministry has delayed the auction date for inferior rice in its stockpile, from the end of this month to next month, allowing more time for officials to conduct a thorough survey and separate quality grains from inferior ones'.
Meanwhile, some sales are ongoing. The Bangkok Post (Aug. 12):
'The government has sold 426,977 tonnes of rice worth 6.29 billion baht in its latest auction.
Since Prime Minister Prayut Chan-o-cha took office, the Commerce Ministry has held nine auctions including five this year in order to speed up disposal of 18 million tonnes of state stocks accumulated from rice-pledging schemes. It has sold 4.4 million tonnes for 48.6 billion baht.
However, the government has fetched an average of only 10,000 baht per tonne of milled rice from the auctions, far below the 24,000 baht a tonne spent by the previous government for pledging excluding management costs and interest rates'.
Though that may be the case, one has to see where the losses went, for a large part in the pockets of farmers ...

Answers to  possible loss of markets?  Bangkok Post (Aug. 7):
'Thailand Development Research Institute (TDRI) fellows are urging the government to establish a Rice Market Development Institute to enhance scientific research, disseminate credible information to farmers and entrepreneurs and improve the competitiveness of Thai rice cultivation'.
Then in Laos they are looking to change rice growing altogether. The Vientiane Times (Aug. 13):
'The Naphok Agricultural Research Centre is seeking to produce early maturing varieties of rice seed for Lao farmers to plant in the coming years, as part of efforts to reduce the disaster related impacts of climate change.
Researchers at the centre are currently conducting ongoing research into some 400-500 lines of rice varieties in order to produce the earlier maturing varieties, according to Mr Nikhom Chantheva, one of the rice researchers.
The rice seeds which are currently being produced by Lao farmers take about 120-130 days before harvesting is possible, while with the new rice seeds, harvesting will be possible after only 90-95 days, he said'.
However as there is still a lot of subsistence rice been grown in Laos, there might just be little takers.


Most of the forthcoming stems from Laos, a country with more diverse agriculture? 
The Vientiane Times reports (Aug. 19) on environmental issues taken in the province of Oudomxay directed at banana growers. It notes that so far no studies have been undertaken so there's no complete picture of what environmental harm is done. But nonetheless the measures will be put into place in order to improve the supposed damage. It also notes:
'There are more than 600 hectares of banana plantations within the province, most of the crop being exported to China, while Luang Namtha and Bokeo provinces are also affected by the same problem.
Last year, Laos exported over 260,000 tonnes of bananas and received payment of about US$45 million according to the Ministry of Agriculture and Forestry.
China offers a large market for the northern provinces so provincial authorities have agreed to allow Chinese companies to invest in various crops for sale to China, including cassava, watermelons, pumpkins and chillies'.
Vientiane Times (Aug. 10) notes the slump in rubber prices.
'Speaking to Vientiane Times last week, a senior analyst in the agriculture and forestry sector, Dr Palikone Thalongsengchanh, said the drop in price will have a lesser impact on companies and investors who planted a large number of rubber trees as they operate with a view to the long term.
They are more likely to survive the slump as they have sufficient capital to tide them over a temporary drop in the market price. They also have more markets available to them.
The greatest impact will be on small growers who planted just a few hectares on their farms and have limited financial resources, Dr Palikone said'.
That seems to contradict reality, where it's often small holders who have a diverse crop production who will wait for prices to rise warranty sufficient returns for labour required solely for harvest. It's often the larger scale of often not well thought through investors who will step out of the industry altogether.

erate times ahead? Lao authorities are mulling a cashew plantation. With cashew growing mostly tied up by the Vietnamese and prices often under opportunity costs it beats me why they would they be contemplating 10,000 ha cashew plantation? As reported by Vientiane Times (Aug. 14):
'Champassak province is aiming to plant 10,000 hectares of cashew trees from now until 2020 to ensure an adequate supply for domestic sale and export'.
It's a strange article implying that on the one hand Laos exports to Vietnam but at the same time there seems to be imports of cashew required. Maybe processing is the better way to move forward?

An insight
to growing coffee in Laos. Vientiane Times (Aug. 10):
'The Lao Coffee Association has called for the government to provide better promotional policies so that Lao products are more widely recognised in international markets.
The Lao government is currently preparing growers and producers for membership in the International Coffee Organisation (ICO) but there are still many conditions to be met.
Coffee exports generated more than US$70 million last year along with indirect income generated by tourism in coffee growing areas.
According to a report from the Ministry of Agriculture and Forestry, the total coffee growing area in Laos is about 83,495 hectares while the area harvested last year was more than 60,000 hectares.
Total coffee output last year was 98,200 tonnes, an increase of 8 percent compared to the plan for the year.
“If we are accepted as an ICO member, we must also provide monthly reports of coffee exports to ICO and address the fact that the current export figures recorded by various government ministries do not match each other,” he [Lao coffee Association President Mr Sinouk Sisombat] added'. 

Thursday, July 23, 2015


Literally the hottest issue currently is El Niño and it's accompanying symptoms of drought in the wider Mekong region.

However the consequences need not be too negative. for instance soothsayers predict an equal bounty of rice this year in Cambodia as compared to last year (Phnom Penh Post, Jul. 8):
'Chan Yutha, spokesperson of the Ministry of Water Resource and Meteorology, said a dry spell owing to effects of El Niño wouldn’t have the same impact on the start of Cambodia’s rice planting this year, with rainfall, once it begins this week, expected to extend until September.
“The rainfall is expected to be even better than last year". 

Thailand though expects a 2% drop. According to Bangkok Post (Jul. 2):
'The government expects drought from the El Nino weather phenomenon to shave Thai rice production for this year's main crop by 2% to 26 million tonnes, though this could mean a rise in prices'.
The overall impact globally might well be negligible. The Bangkok Post (Jul. 8):
'The global rice harvest will increase less than previously estimated because of a strengthening El Nino, reducing stockpiles for a second year, the United Nations said.
Milled output will reach 499.3 million tonnes this year, compared with 499.9 million tonnes forecast in April, the UN's Food and Agriculture Organization said Wednesday. That would be higher than a revised 494.7 million tonnes in 2014'.
One aspect that may well change is the price, as Thailand is the bellwether for global rice prices, being the largest exporter in the past decade.

However a few weeks later, prospects are more depressing as rains are yet to impact Thailand. The Nation (Jul 16): 
'Amid falling water levels in the Chao Phraya River, water distribution will be halted for the agricultural sector from today, the Royal Irrigation Department said, adding all water will be allocated for domestic use and to sustain the ecology.
As a result of the ban on the use of water in the agricultural sector, it was reported that the farmers in Ayutthaya's Lad Bualuang district have to buy water from water trucks to save their rice crop, which will be ready for harvest soon. A local reporter revealed that the price of water per truck was Bt800'.

The Bangkok Post reported two days earlier more or less the same but noted that farmers would receive compensation.

And though for the nation itself there may be less disruption, farmers will be harvesting less, increasing their financial burdens. The Chiang Rai Times (Jul. 9):
'The drought and the critical water shortage in dams have prompted the Agriculture Ministry to ask farmers to hold off on planting their crops. The Office of Agricultural Economics estimated that the delay could cost farmers in Thailand’s central plains alone 60 billion baht ($1.8 billion) in potential losses'.
Risky business
Meanwhile in Thailand the prospect of bleak rains means that buying insurance is becoming a hot item (Bangkok Post, Jul. 14).
'Farmers cultivating 1.33 million rai [200,000 ha] of rice paddy bought crop insurance as of July 8, said Pravej Ongartsittigul, secretary-general of the Office of the Insurance Commission. ... This year's insurance programme divides farmland into five areas depending on risk exposure. Farmers with the lowest risk are required to pay 60 baht a rai while the government contributes 64 baht a rai.
In the highest-risk locations, farmers are required to pay 100 baht a rai while the government contributes 383 baht a rai. Insurers will pay 1,111 baht a rai [$US200/ha] for damaged crops from a natural disaster and 555 baht a rai for damage from pests or diseases'.
It looks like a pay-out may well be on the cards ...

Insurance may also be catching on in Cambodia. The Phnom Penh Post (Jul. 10):
'The Cambodian Agriculture Cooperative Insurance Company (CACIC), an initiative established by the Cambodia Center for Study and Development in Agriculture (CEDAC), yesterday announced the start of an agriculture micro insurance service to help rice farmers better respond to climate change.
Farmers who become a member of CACIC will have to pay an insurance fee of around $10 per hectare each season, although this cost will vary slightly depending on the type of rice variety gown.
In return, they receive consultation on farming techniques, climate change resilience methods and will get an insurance payout when their crop is damaged either by flood or drought, according to Yang Saing Koma, president of CEDAC.
looks like a nice initiative but seems rather expensive for small farmers. It also needs to take off seriously:
'In the last two months, about 60 farmers have signed up with CACIC, registering more than 60 hectares of rice plantation. The fund has generated around 2.7 million riels, or $650'.
The best  advertisement would be farmers receiving a pay-out after being affected, but that's not what we want.

Fear the fake. Not.
The Phnom Penh Post (Jul. 15) has a curious article:
'The Cambodian Rice Federation held a press conference yesterday to allay fears drummed up by local media that fake rice is being distributed in the Kingdom.
Rumours began to surface this week when a reporter with local news site Khmerload published a story claiming to have eaten plastic rice'.
A change of subject, but still on fakes. Cambodian coffee is often substituted. This report (Munchies, Jul. 16):
'But it’s a con. Coffee here is cut through with scorched corn, soybeans, and dodgy flavourings. It’s a discovery as bitter as the filtered dregs thrown into Phnom Penh gutters. angus-pouring-his-own-blendPhnom Penh coffee roaster Angus Whelan pours a cup of his own blend'.

How does Thailand rid itself of rice stocks? 
'The Energy Ministry has been assigned by the government to help off-load around 5.89 million tonnes of deteriorated rice held in stockpiles with the plan at the first stage to convert around 1.3 million tonnes of the rice into ethanol fuel and the rest into biochar (bio-charcoal)'.
Reported in the Nation (Jul.3).

However not everybody agrees on this solution. Same source (Jul. 13):
'Rice traders have urged the government to rush to hold an auction for 1.29 million tonnes of rotten rice from its stockpiles while demand in the market is high during the drought.
"Instead of opening bidding for biogas or ethanol production, rotten rice could be produced as feedmeal. The government should urgently release its rice in the meantime to clear out stocks," a rice trading source said last week.
The government should allow general bidders, not just bidders for biogas or ethanol production, as many industries also want rotten rice'.
Exports of rice from Cambodia are up by 60% this year so states Xinhua (Jul. 3). 
Roughly a fifth of this is to China which is emerging as Cambodia's main rice importer. This year exports to China are already up by 50% or 24,000 tonnes. However overall month on month exports are already up by 100,000 tonnes over the same period last year. It's unclear why and where the rest of the increase comes from / goes to. 
The latter from the latest data from the Mekong Oryza website.

The Nation (Jul. 13) notes that rice exports from Thailand are behind target:
'Thailand's rice export association lowered its annual target from 10 million to 9.5 million tonnes on Monday, due to a slowdown in the global economy and fears that drought in Thailand could slash output for the year.
Chukiat Opaswong, honorary president of the Thai Rice Exporters Association, said Thailand would face a tougher export market due to a global slowdown in trade and fluctuating exchange rates.
He added that concerns over the drought on Thailand’s rice production have boosted export prices and could drive buyers to Thailand’s competitors'.
Vietnam's exports are back in the doldrums so notes vietnamnet (Jun. 26). 
'According to the Vietnam Food Association (VFA), Vietnam had exported 2.1 million tons of rice by the end of May, earning $870 million, a decrease of 10 percent in export volume and 13 percent price decrease in comparison with the same period in 2014.
China remains Vietnam’s largest rice consumer, which bought 35 percent of the 2.1 million tons of rice Vietnam exported in the first five months of the year.
However, experts have warned against the heavy reliance on the Chinese market. China, despite high demand, has been tightening imports across the border gate since mid-2014, which has made it risky for Vietnamese enterprises to export rice to the market.
A source said that even contracts on exporting rice through official channels were also canceled, stressing that it was very risky to do business with China.
Nguyen Thi Bich Vuong, director of Hung Thinh Trade and Import/Export Company in Lao Cai province, specializing in exporting rice across the border gates to China, said only several consignments of goods were exported in the first three months of the year.
Meanwhile, no consignment has been exported since April when China began tightening control over imports'.

Land policies are often a contentious issue in Cambodia. And it should be noted that Cambodia has not yet lost it's spots. Cambodia Daily (Jul. 20):
'Environment Minister Say Sam Al was in Preah Vihear province on Sunday to help inaugurate Try Pheap’s newest project, a $52-million rubber plantation and additional facilities that the timber magnate has cleared thousands of hectares of protected forest to build.
Mr. Pheap was granted the 10,000-hectare concession inside the Beng Per Wildlife Sanctuary in 2011, and has clear-cut most of the site since. 
Numerous reports and investigations have placed Mr. Pheap at the heart of a vast illegal logging operation that involves collusion with government officials and is worth hundreds of millions of dollars, allegations that both he and the government deny'.
Odd that everybody seems to be stepping out of rubber and here there's a major investment in producing more future surplus.

This report coincides with a wider report on the wider push to export more rubber. From the Phnom Penh Post (Jul. 22):
'Protected areas and other biodiversity hotspots across Southeast Asia are increasingly under threat from expanding rubber plantations, with Cambodia at risk of losing more ecologically important land than any of its neighbours, a recent study reports.
If current trends continue, Cambodia stands to lose more than 2,500 square kilometres of protected areas to rubber plantations by 2020 – an area about the size of Luxembourg – according to a new study to be published in the September issue of the journal Global Environmental Change.
That number was significantly higher than for the other four countries surveyed – Laos, Myanmar, Vietnam and Thailand – with Vietnam clocking in at 1,900 square kilometres of protected areas potentially lost.
Cambodia is also predicted to cede more ground than that quartet in every other category of environmentally significant land save one: conservation corridors, where Vietnam fares slightly worse'.
Certainly not the best pupil in the class.

Meanwhile with the focus on rubber, governments are trying to be inventive. The Nation (Jul. 19):
'Thailand and Russia are considering a barter trade deal, with Russia seeking 80,000 tonnes of rubber while Thailand wants weapons and other goods in return'.
Looking for alternatives? Here are a couple:
Phnom Penh Post (Jul. 9): 
Cambodia is seeking to export its mangoes to South Korea, according to a senior official at the Ministry of Agriculture, Forestry and Fisheries.
Waiting for the boom to bust? Growing Cambodia's Kampot pepper is increasingly popular. The Phnom Penh Post reports (Jul. 8): 
'Kampot pepper production almost doubled during 2015’s harvest season compared to last year’s, although prices have remained flat, according to an industry representative'.
And finally the problems with growing rice in Nepal, a very insightful article. The Nepaltimes (Jul. 3) mentions how the Nepali rice agriculture is succumbing to mechanisation:
'Even as Nepal’s annual rice production keeps dropping due to the shortage of farmland, fragmentation of holdings, labour shortage and falling productivity due to government neglect, here in the plains of eastern Nepal there is a quiet green revolution happening. 
Combining SRI with mechanisation and setting up farmers’ cooperatives, boosts productivity, creates jobs and empowers many women like Sabita Chaudhary. If what is happening here can be scaled up to the national level, Nepal could even export rice again'.

Tuesday, June 30, 2015

Dead Wood

Lagging world market upward price moves have stalled the ambitions of Cambodian rice exporters, so it seems. At least for the mean time. 
The Khmertimes (Jun. 28) notes how all the goals for massive exports of rice from Cambodia have not and / or will not be achieved.
'Cambodia’s ambitious goal of exporting one million tons of rice this year has been quietly dropped. A follow-up export goal of 600,000 tons also is falling by the wayside.

Undermining these goals is the reality of the rice paddies: labor emigration to Thailand, high costs for milling, and spreading bankruptcies among small rice farmers. This is the view of two experts affiliated with the Cambodia Rice Federation, the leading industry group'.
One tell-tale sign is the inability of Cambodia to compete. Phnom Penh Post (Jun. 23):
'Following Cambodia’s loss of a hefty Filipino rice tender to Vietnam last week, industry insiders say logistics and production costs are hampering the competitiveness of the Kingdom’s rice exports.
Cambodia lost a 100,000-tonne tender for the fourth time running after its final price of $455.50 per tonne came in way higher than the Vietnamese company’s final $416.85 per tonne deal, itself only marginally lower than Thailand’s $417'.
How does the government take the news?
'Mey Kalyan, senior adviser to the Supreme National Economic Council, said the government was working on improving transport and further “rationalising” the rice sector by focusing on higher-margin varieties, such as jasmine rice.
Although agreeing that export costs were high compared to region, Kalyan said the loss of the Filipino rice tender was in large part due to the Phillippine’s traditional reliance on Vietnam for large quantities of cheap rice.
Kalyan added that stubborn global rice prices – which have not budged significantly since the global commodity boom ended in 2008 – further held back profitability.
“The prices are stable, but the cost is higher.”
In fact rice exports from Cambodia to Europe are stable at least based on annual figures. The Phnom Penh Post (Jun. 20) compares these with those from Burma which seems to see surges in exports to the EU. Their exports are now just 10% behind those of Cambodia.

The Phnom Penh Post reports (May 28) on unethical rice trading and how the Cambodian government is seeking to crack down on these practices.
'The Ministry of Commerce (MoC) is ramping up its efforts to stamp out “unethical” rice exporters mixing their produce with rice from neighbouring countries, as the European Union becomes increasingly concerned about rice tampering.
In an open letter issued on May 11 the ministry said it will stop issuing Certificates of Origin to exporters found to be using non-Cambodian rice, as this could lead to the European Union withdrawing its duty-free trade preferences that Cambodia enjoys under the Everything But Arms agreement.
“MOC will have a group of inspectors who will launch surprise inspections in rice exporting companies and rice millers to investigate the issue,” the letter added'.
A big surprise (Phnom Penh Post, May 29):
'The long-awaited Agricultural Extension Policy, rolled out yesterday by the Agriculture Ministry, will focus on making up-to-date knowledge and technology accessible to farming communities and increase efficiency and productivity in the sector'.
Going by evidence of other countries in the region having no extension service means savings in national expenditure while the perceived public goods supposed to be dispensed are all too often seriously lacking. Or the extension service itself is a government run business preying on farmers ...
'At least 2,000 additional agricultural-extension specialists will be needed to fill the gaps in human capital. Currently, there are only 70 agricultural-extension officers at the national level and less than 1,000 at the provincial level, Soeun said'.
Creating another base for bureaucracy, cleptocracy and vote buying. Cambodia is better off without a formal extension service.

Mekong Oryzae has an opinion article on their website. The May 25 published piece is from Riza Bernabe who is the policy coordinator and Maya Quirino, the media, advocacy and communications lead, both of Oxfam’s GROW campaign in East Asia. 
In the article they argue that climate change is undermining the viability of the current agricultural system which they say depends to a large amount on small scale farmers often reliant on small areas of riceland for their survival. It then notes evidence of the change and it's possible effects. What to do?
'ASEAN must duplicate sustainable agriculture and agro-ecology practices across the region. One such program is Systems of Rice Intensification (SRI), which optimizes harvests without depleting soil nutrients, and uses rice varieties that can withstand floods or droughts. SRI is already gaining ground in Cambodia, Vietnam and the Philippines. Women, who are also food producers, must be included in these programs. Women are often mistakenly not counted as economic actors, and are therefore left out of development projects'.
Pity that not more is made of possibilities to adapt to changing climate. Floods seem fine enough, certainly as they come with increased fertility afterwards. Droughts though call for different directions. Water storage? Irrigation? No mention is made of either ... 

The current El Niño weather patterns will contribute to more drought conditions, certainly in the upcoming rice season. However the rice industry seems to think that expected lower production will not make much difference in the short term for prices (Bangkok Post, May 27):
'The "price is weak short term, in three to six months, because of Thai stocks and competition among major exporters," The Rice Trader's Mr Zwinger said in an interview on May 21. "The market today is more concerned on Thai stocks than El Nino."
The weather spells more problems as farmers expect assistance in face of adversity. Bangkok Post (Jun. 29):
'Farmer leaders have slammed the government for not doing enough to help farmers as the drought crisis continues to hit several provinces nationwide, increasing pressure on the "backbone of the country"already struggling with debt'.
Meanwhile Thai authorities are hoping to sell a fair share of their stocks of rice. The Bangkok Post (Jun. 6):
'The government plans to call bids for another 2.6 million tonnes of high-quality rice from state stocks between now and August while transferring low-quality and substandard grains to the industrial sector'. 
They also note that exports are down by nearly 10% this year ...

On the 5th of June (Bangkok Post) the Thai government (slash army) decided how to rid itself of unwanted grain:
'The Thai government may sell most of its stockpiled rice to ethanol and animal-feed producers because it's no longer fit for human consumption'.
Basically it means going to the dogs ...

More losses
In the roundup of Cambodia's other agricultural news we first start with looking at turning cassava into electricity. I doubt whether with current energy prices this makes sense, but obviously investors are making different calculations. Phnom Penh Post (Jun. 3):
'A planned biomass plant run on cassava in Battambang province looks ever more likely after a trial period with 100 farmers was successfully completed.
Idemitsu Oil and Gas signed a memorandum of understanding (MoU) with the Ministry of Agriculture, Forestry and Fisheries and the Cambodia Mine Action Centre (CMAC) in 2012 to explore the development of biofuels in Cambodia'.
They seemed to have done their homework.

Other investor news (Phnom Penh Post, Jun. 1):
'Tokyo-based conglomerate All Nippon Airways Trading (ANA) is in talks with the Mong Reththy Group (MRG), to establish a banana plantation with plans to export to Japan, the Cambodian agriculture tycoon said on Friday'.
A great alternative (Phnom Penh Post, Jun. 25):
'Exports of Kampong Speu palm sugar with geographical indication status increased sharply this year thanks to growing demand from South Korea and France, according to a representative of the Kampong Speu Palm Sugar Promotion Association’s (KSPSPA).
According to KSPSPA president Sam Saroeun, exports of Kampong Speu palm sugar reached 75 tonnes this year, an increase of 50 per cent compared to the same period last year'.
In other developments blame biofuel growing for power politics resulting in loss of access to agricultural land. The Phnom Penh Post (Jun. 6):
'Houy Mai has lost everything to the global demand for cheap sugar and biofuel. The 54-year-old mother-of-eight has fought a years-long battle with Mitr Phol, Asia’s biggest sugar producer and one of three major suppliers to Coca-Cola.
In March, the government issued a decree that cancelled Mitr Phol’s concessions, covering about 20,000 hectares – almost two times the legal limit.
But the area now swarms with soldiers who have taken over numerous sawmills
Three of these large sawmills were operating last week, with soldiers lounging in hammocks aside towering piles of sawn lumber, waiting for military trucks to arrive at night and cart the precious wood to a drop-off point near the border, from where NGOs Action Aid and Oxfam allege it is smuggled into Thailand and processed into sleepers for railroad construction'.
The article tells the familiar tales of woes of how farmers are left (literally) in the gutter. Not even hope. A very insightful article.

Going analog
And then this to worry about.
Basically it's going to the dogs as they say ...
It looks like rice but it's not. Jakarta Post (May 31):
'... analog rice was a food commodity that looked like normal rice but was made from all kinds of tubers, making it suitable and safe for consumption
The INDEF economist said a number of parties had reportedly attempted to hamper the development of analog rice as they were concerned the newly discovered staple food would disrupt consumers’ dependence on rice.
“Once analog rice enters markets, people’s dependency on rice will be disrupted. This poses a challenge to certain parties. With the current synthetic rice issue, people are really worried. What happens now is that people cannot differentiate between synthetic rice and analog rice,” said Enny.
She said once the synthetic rice issue contaminated the mindset of consumers, it would be difficult for researchers or any parties supporting the development of analog rice to introduce their discovery to the people.
“In such situations, people will just keep it in their minds that analog rice is not ‘original’ rice. They will not pay attention to whether or not analog rice is suitable and safe for consumption,” said Enny'.
It seems to be a very Indonesian issue, little is known beyond the archipelago.