Thursday, July 23, 2015

Quiet

Revising
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.

Plastic
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'.

Waste
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'.
Heavy
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'.

Loss
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'.
Flat?
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

Ambitions
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.

Briefed
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.

Sunday, May 24, 2015

Secrets

As much as I hoped that the Facebook page of Mekong Oryza Trading would carry a lot of Cambodian rice related news, the reality has been a little sketchy. Apparently not all snippets have been deemed postworthy and they have become more selective.
Especially when it comes to negatives in the trading practices itself. Where it usually takes just a bleep to post, it took 4 days to mention that the government is concerned about rice trading practices.

And what was said? 
Phnom Penh Post (May 4) mentions price fixing of agricultural produce:
'The Ministry of Agriculture and Forestry said yesterday that they were investigating a possible secret agreement between middlemen or traders in the supply chain to manipulate the price of agriculture commodities, leaving farmers with no option but to sell their products at a lower price'. 
Reactions to this article suggest that government may also be part of the problem.

Response was swift, as the PM was reported (Phnom Penh Post, May 5) calling for government officials to stop meddling with trade deals at the expense of farmers:
'Prime Minister Hun Sen urged provincial governors yesterday to stop government officials from colluding with traders to fix agricultural commodity prices, giving farmers no choice but to sell their products at below-market rates'.
The Khmer exporters had earlier criticised the government for it's official practices: their own nations export procedures. The Phnom Penh Post (Apr. 23): 
'The executive committee of the Cambodia Rice Federation (CRF) will meet with two ministries today to explore the possibility of reducing the logistical and energy costs of transporting rice, a key factor to keeping Cambodian rice exports competitive compared to neighbouring countries, a CRF official said.
The meeting is being held with the Ministry of Public Works and Transport and the Ministry of Mines and Energy, said Kim Savuth, head of the CRF’s cost competitiveness executive committee. Savuth added that high energy and logistics costs were some of the main reasons why Cambodian rice remained more expensive than that of its neighbours'.

Motionless
There's little to suggest that world market price changes for rice are imminent, it still a buyers market with prices nudging southwards.
The Nation (May 11) has an article on how exporting nations are competing each other with lower prices, mostly achieved by devaluation of their currencies.
'He said that for every Bt1 the Thai currency weakens against the US dollar, the price of Thai rice drops by about $10 per tonne. 
Vietnam's decision to devalue its currency also cuts the price of its rice by about $3 a tonne'.
Thai stocks of rice are down but not by much. Oryzae.com (May 19) notes that 11 million tonnes remain in storage.

Bangkok Post (May 8) adds that Thailand regaining it's position as the world's biggest exporter may be on the back burner for the time being: 
'Thailand is unlikely to regain its crown as the world's largest rice exporter this year due to the slower-than-expected global economic recovery and a dearth of positive factors'.

Trade talks between Cambodia and China with Cambodia hoping to increase access to China for it's rice (Phnom Penh Post, May 22);
'“It is expected that there will be detailed discussion of Cambodia’s request to double the rice quota to China to 200,000 tonnes,” [Ministry of Commerce spokesman Ken Ratha] said, adding, however, that no agreement or memorandum of understanding is expected to be signed.
It doesn't seem to be China's interest. Phnom Penh Post (Apr. 13):
'China will increase its agricultural imports from Cambodia to include bananas, mango and soybeans, having already signed a food safety and health protocol for the import of corn last year, according to the Ministry of Agriculture, Forestry and Fisheries.
...
Srey Chanthy, independent economic analyst, said increased demand from the Chinese market coupled with sound agricultural policies can help address issues like lack of sustainable supply and low productivity among Cambodia’s farmers.
“It is an issue in the short term. But in the medium and long terms, if no proper strategies are in place, I am afraid that the issue is not only about higher volumes for export, but low productivity, seasonality and regularity of supply, lack of irrigation and efficient water use and management,” he said.
“For the growing season, it may not be problematic. But the problem is how to supply these products and export to China on regular basis throughout the year, with the amounts it demands. Issues are not related to only lack of irrigation and farming techniques, but also lack of farm labor,” he added'.
Meanwhile Vietnam are experiencing another form of trade terms with China. China is physically closing the market (tuiotrenews, Apr. 27): 
'Hundreds of trucks fully loaded with rice have stayed motionless in areas around different such ‘secondary’ border gates in the northern Vietnamese province of Lao Cai in the last ten days.
According to the Ban Quan border guard unit in Lao Cai’s Bao Thang District, Chinese buyers have stopped importing rice from Vietnam in the last two weeks because their authorities have tightened checks along the border'.
Vietnemnet (May 9) also notes how China wants Vietnams rice, but at lower prices:
'Rice exports to China across the border have been stagnant since the second half of April as China unexpectedly barred rice imports from Vietnam.
...
Professor Vo Tong Xuan, who is considered the leading Vietnamese rice expert, noted that despite great advantages, Vietnam still has difficulties in exporting rice to China.
According to Xuan, the majority of rice has been exported across the border by Vietnamese exporters even though they know cross-border exports cannot bring high profit. This is because they do not have to fill out many kinds of documents and do not have to pay tax'. 
Organic rice is reaching more markets. Phnom Penh Post (May 20): 
'Local rice exporter Amru Rice is close to signing an agreement with an American importer to bring Cambodian organic rice to the American market, according to the rice exporter’s chief executive'.
If Japan signs a new trade deal with the US, Thai rice exports to Japan will suffer (Bangkok Post, April 15):
'"As Japan wants its rice to be excluded from the tariff-elimination goal of the TPP, the government must come up with an alternative measure to improve foreign access to the Japanese rice market," said Mr Honma, who advised Japanese Prime Minister Shinzo Abe during his first term'. 
So if I understand correctly, if you want to protect your own market you'll need to give away concessions which mean that signee the USA would have preferred access at the cost of Thai rice?
Tales of future dreams. Dreams that were once true. For Burma. Bangkok Post (April 9):
'Dressed in Chelsea football shorts and a wide-brimmed hat, Than Tun toils away in his paddy field on the outskirts of Yangon, sweat pouring down his sinewy arms.
Gruelling work that once helped Myanmar become the world's largest rice exporter is today a Herculean and often lonely job for farmers striving to return the impoverished nation to its former grain prowess.
...
But rotting stocks, creaking infrastructure, heavily indebted farmers and minimal foreign investment are among the hurdles it faces.
...
Rice is a good poverty alleviation tool, he [Sergiy Zorya, a Bangkok-based expert on rice production at the World Bank] explains, because money actually filters down to poor farmers rather than resting in the hands of corporations or middlemen.
He points to Cambodia, which has heavily invested in improving rice production and exports. Over the past 10 year,s each one percent increase in GDP has resulted in reducing the country's poverty rate by 5.2%'.
Growth issues
Phnom Penh (May 19) Post has a long article on the use of glyphosate. 
Despite recent warnings on it's links to cancer (source), the article gives the yea sayers all the space in the articles conclusion:
'Lor Rasmey, spokesman for the ministry, also said yesterday he believed the herbicide to be of only minimal danger, explaining, “In France, they still use it.”
The argument mirrors that commonly used in the US, where as recently as 2010, glyphosate was referred to as a “miracle chemical for farmers”, according to the New York Times.
This language was also parroted in a bulletin for Cambodian farmers distributed by USAID in 2011, which states the “very low toxicity” of glyphosate and recommends it as an effective farming tool.
When asked if the agency would reconsider its endorsement, a spokesman yesterday referred to comments made by Deputy Secretary of State Antony Blinken on the situation in Colombia, who told El Tiempo: “I can tell you that glyphosate is used in all states of my country, and believe me, we’d have taken action if there was something wrong.”
Phnom Penh Post (Apr. 20). Cambodia's economy is expanding, but not for the poor where the lower price of rice is impeding investment. This despite misgivings that higher prices for rice are not good for the rural community, sometimes you can never win. An excerpt:
'The agriculture sector, one of Cambodia’s key growth drivers, remains the biggest worry for the World Bank, as a slowdown in the sector will have a ripple effect on poverty alleviation efforts.
“The agricultural sector has decelerated. This is the driver [of the economy] that has slowed the most and the reason is low yield and low rice prices,” said Enrique Aldaz-Carroll, senior country economist at the World Bank'.
Development watch
Cambodia's land policies are nothing to be proud, far from it. So it's no wonder that foreign investment in it's agricultural sector is lagging. One of the more upfront investors, Thailand's Mitr Pohl has announced that it will be pulling out of Cambodia (Phnom Penh Post, 11 May):
'Asia's largest sugar producer, Thailand’s Mitr Phol Sugar Corporation, has withdrawn from its three plantations in Oddar Meanchey province following years of criticism over alleged illegalities and human rights abuses at the concessions, a development watchdog has said.
The announcement itself was not confirmed, and oddly two days later it was in the press that the EU and Mitr Pohl were making
"good progress” towards finalising an agreement with the government over compensation claims made by thousands of villagers from Oddar Meanchey province who were evicted from their homes by Thai sugar giant Mitr Phol'.
But beyond rice there are alternatives. Phnom Penh Post (May 4):
'From January to May this year, more than 1,100 tonnes of longan were exported to China, up 63 per cent from the 676 tonnes last year, according to Sreng Sreang, deputy director of the Pailin Longan Farmers’ Community.
“There has been increasing demand for Pailin longan in the Chinese market, Chinese buyers tell me. They buy longan from us and do the packaging in Thailand before sending them to China,” he said.
Pailin longan is harvested from December to May. One kilogram of longan costs around 5,000 riel, or $1.25, almost a two-fold increase from three years ago when the price stood at $0.70'.
Investment in agribusiness (Phnom Penh Post, Apr. 30). Despite lower prices Mong Reththy company will provide investment in palm oil processing:
'As of February, Reththy’s company had 16,000 hectares of palm oil trees, 8,000 of which were ready for harvesting, with plans to extend the farm to 30,000 in the future.
Last year, the company exported 22,000 tonnes of crude palm oil, up from 19,000 tonnes in 2013. But price falls had significantly cut into the firms revenue'.
Where rice growing nations are having problems with raising prices, tactics to raise rubber prices seem to be having more effect. The Bangkok Post (May 29) notes:
'Rubber prices jumped the most in nine months as shrinking stockpiles in China and steps by the biggest producers to curb supplies bolstered speculation a global glut will dissipate.
The commodity surged 5.5% on the Shanghai Futures Exchange, the daily limit and the biggest gain since July for a most-active contract, to close at 14,195 yuan (US$2,288) a tonne. Prices are up 13% this month, the most since September 2012'. 
For the farmers sake let's hope the prices are gains in reality, but I suspect that this is just a minor hiccup: there's simply too much rubber waiting to be harvested, current prices are simply dissuading collection as they're not covering the costs of harvesting. Any sustained price movement upwards will see collection kick in again, cushioning any gain.

On the other hand, rubber prices going up are not all good news. The rubber bubble has exploded sometime ago (2 years?) and only now does the Thai government see fit to take action on protected forests being encroached on by rubber farmers (Bangkok Post, April 21) as they hausse for planting rubber seemed to indiscriminately target existing forests:
'With the blessing of the National Council for Peace and Order [read military junta], the Royal Forest Department intends over the next two years to seize back one million rai [50,000 ha] of former forest that has been encroached on, cleared and planted in rubber.
This one million rai is just one-quarter of the area of what was once forest reserve land that has been illegally taken over and planted in rubber trees'. 
So much for the protection of forests ...

Monday, April 13, 2015

Better informed

Probably one of the major events the past month has been that the Facebook site of Mekong Oryza Trading has suddenly decided to publish links to stories on Cambodia and rice. It also includes relevant articles from other (Southeast) Asian media as well as oryza.com. An added instrument to keep abreast of rice related news. 

It also means I don't have to regurge  all rice related news for Cambodia. Just comment on trends or diabolical developments ...

Unfair
Big news (Cambodian Daily, Apr. 8):
'Cambodia’s year-on-year rice exports for the first three months of 2015 increased by 77 percent, according to figures released Tuesday by the Cambodia Rice Federation (CRF)'.
Reasons 1-10 for this increase: China.

Oryza.com (Mar. 27) highlight the anxiety of Italian rice farmer who feel threatened by lower tariff for some rice producing nations. On Cambodia:
'However, Italy's Ente Nazionale Risi, the National Agency for rice noted that the figures provided by Cambodia on 2015 rice exports are  wrong as the EU data shows that the decline during the stated period has been only 10%. They noted that despite a decline in imports from Cambodia, Italy is not able to recapture its lost share in the local market'.
Maybe Italian farmers are doing something wrong ....

Earlier the Phnom Penh Post (Mar. 20) noted the Cambodian side to the argument:
'Sok Puthyvuth, president of the Cambodia Rice Federation, said yesterday that the purpose of the meeting was for the delegation to have a greater understanding of Cambodia’s rice industry, to better inform their discussions with Italian producers.
“We clarified that Cambodian rice exports to Europe are largely only fragrant rice, so it does not affect the [Italian] farmers,” he said, Puthyvuth said that Italian rice farmers produce largely a white rice variety that did not compete with Cambodia’s fragrant rice'.
Cambodia is making progress with it's moves for Geographical Indication for a number of agricultural products, so notes the Phnom Penh Pot (Mar. 13):
'Feasibility studies on achieving Geographical Indication status for Thma Koul rice, Kampot durian and Cambodian golden silk have been completed, officials said yesterday.
...
Song Saran, CEO and president of AMRU rice and CRF board member, said achieving GI status for Cambodia’s Thma Koul rice would open up new markets for Cambodian rice.
“It will help boost Cambodian rice exports and the higher value will increase margins for farmers and exporters. With GI status, it will take exporters less effort to promote rice to buyers,” he said'.
A video on you tube making the rounds on social media concerning a rice planting machine.

Futures
The Bangkok Post (April 8) sees it relevant to note that the dry season rice crop in Thailand has dropped to a 15 year low. The article blames poor rains. Though I believe it's more to do with poor (and possibly lower) prices in recent years and the fact that subsidies have disappeared ... witness this sentence:
'Futures traded on the Chicago Board of Trade have slumped 31% in the past year to $10.70 per 100 pounds'.
The Bangkok Post (Mar. 24) reveals that one of the driver of lower rice prices is the Thai government itself as it tries to rid itself of stocks. They are coming at a bad time; oil prices are down and many of the buyers are stuck with cheaper Euros.

Sad news from the Nation (Mar. 27):
'A 46-year-old rice farmer in Phichit's Muang district committed suicide by hanging himself yesterday morning allegedly due to overwhelming debts. 
A police investigation found that Chid Chusri left home on Wednesday night to "check on water pumps" and didn't return. His relatives went looking for him and found his body hanging from a tree in his rice field at 8.30am yesterday.
His older brother, Siplapachai Chusri, told police that Chid had been under a lot of stress because he had debts amounting to Bt700,000 - more than Bt400,000 of which was owed to a local branch of Bank for Agriculture and Agricultural Cooperatives (BACC). He said Chid had recently borrowed Bt7,000 from a relative to pay the bank's debt interest'.
Tricks
A complicated article from Vietnamnet (April 1). This is the gis: Chinese businessmen are trying to buy rice through border trades rather than through Vietnam's official channels. They are paying more, but due to avoidance of (export) taxes, making more. The consequence is that the domestic price rise, meaning official export become less competitive, meaning less taxes ...
'The Vietnam Food Association said that Chinese businesses top the list of trade partners who try to lower prices by “tricks” and cancel contracts.
In 2013 alone, 64 percent of rice export contracts were canceled by Chinese traders. They delayed the delivery schedules for other contracts and lowered prices'.
One of Vietnam's bigger food company's, Southern Food Corporation Limited (otherwise known a Vinafood 2) is in the problems. Inefficiencies have resulted in losses covered by debts, which were than passed on through the conglomerate. Vinafood 2 plays a large role in Vietnam's rice industry and has also been forced to brunt losses in deals made at above market price. More on this at oryza.com.
The Phnom Penh Post (Mar 30) notes that the rice exporting joint venture in Cambodia (Cavifoods) would supposedly be unaffected.

Branding is hot in Cambodia, now the Vietnamese want the same, so reports Oryza.com (Mar. 24).

Stay at home farming
If you want to know more on how rubber prices are keeping up (or in this case down), read this good background article from the Bangkok Post (Mar. 24). Soothsayers reckon prices  will not drop any further as current prices reflect the cost for harvesting and further processing only; no returns on investment / land /management, etc., so if prices drop further, rubber collectors will prefer to just stay at home ....

On the other hand, one crop on the up are cashews. The Phnom Penh Post (Mar. 20) features Kampong Thom Cashew Nut Association which hopes to get government support to encourage more cashew growing. Prices have risen this year by 50%.

Lawful
Not included in Mekong Oryza overviews, but probably of more significance for the local Khmer farmer be he / she a rice farmer or otherwise. Cambodian NGO's have brought to the attention that more than 2 million hectares of land were under Economic Land Concessions an agreement with central government giving investor a free hand on huge tract of land to do as they please (Phnom Penh Post, Mar 31). 
Anything goes, including driving out locals as well a full scale  deforesting which influences water levels and creating Despite a 2012 ban on new concessions, the granting of these has actually accelerated.  
Licadho has a nice interactive map. Branding would help Vietnam to upmarket it's rice. Or at least keeping up with the competition.

Hands washed
On topic, a very recent report (Apr. 11) in India's Economic Times tells how some farmers are upset with hybrid rice:
'"Liangyou 0293", a hybrid rice variety developed by Yuan Longping High-Tech Agriculture Co Ltd (Longping High-Tech) and grown around six cities of east China's Anhui Province has been reported to suffer massive crop failure after being infected with rice blast, a serious disease caused by the imperfect fungus'.
"Liangyou 0293", a hybrid rice variety developed by Yuan Longping High-Tech Agriculture Co Ltd (Longping High-Tech) and grown around six cities of east China's Anhui Province has been reported to suffer massive crop failure after being infected with rice blast, a serious disease caused by the imperfect fungus.

"Liangyou 0293", a hybrid rice variety developed by Yuan Longping High-Tech Agriculture Co Ltd (Longping High-Tech) and grown around six cities of east China's Anhui Province has been reported to suffer massive crop failure after being infected with rice blast

"Liangyou 0293", a hybrid rice variety developed by Yuan Longping High-Tech Agriculture Co Ltd (Longping High-Tech) and grown around six cities of east China's Anhui Province has been reported to suffer massive crop failure after being infected with rice blast

Nearly 700 ha were to be affected. Longping blame the mis-harvest on adverse weather conditions ...
Damage control as reported by CRI (Apr. 11):
'China's agricultural authority says the massive crop failure in Anhui province does not involve a super-hybrid strain of rice.
...
Super hybrid rice now accounts for around 30% of the country's overall rice cultivation'. 

Thursday, March 12, 2015

Leading by example


Market
Though not significant in itself, the Cambodian PM admits that the country is not going to meet the plans for exports of 1 million tonnes this year. According to the Cambodian Daily (Feb. 18), increased competition is partly to blame as are processing problems.

Export problems though will remain in light of dropping prices thus favouring importers. Oryza.com's rice market overview shows prices continuing to drop, 0,8% over the month, roughly 10% in annual terms.

How this pans out in reality? Just look at this piece of info from Thailand. The drop in international prices further hinders Thailand's efforts to recoup some of the past financial pledges which are now safely in hands of Thai farmers. Bangkok Post (Feb. 27): 
'Thailand is likely to face difficulty selling rice now that global market demand is slowing amid greater supply and price competition, said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. World rice trade is estimated at 41 million tonnes this year, down from an earlier forecast of 42 million tonnes, he said'.
The Bangkok Post notes (Feb. 25) that the losses under the last democratic government rice policies in financial terms have been revised upwards. Why? Because the current prices are dropping, so in today's terms that means more losses. But if every day prices drop, then isn't the current government responsible for further losses, because they aren't selling fast enough? 

A new kid on the block? Laos wants to boost rice exports. Vientiane Times (Feb.17): 
'The Lao government is working to provide messages on food safety as it continues to promote the increased production of commercial crops for export to neighbouring countries, especially rice production'.
The article sums what's needed for exporting and how the rice production is coming along as well as mentioning that in 5 years production should be 5 million tonnes, while this year it's estimated that production will be 4.2 million tonnes. 
Unsure how exports would work out, as most of Laos rice is sticky rice, which holds little commercial value outside Laos and northeast Thailand. Maybe pushing this might open an exclusive niche for Lao exports. But as they mention interest from China, I doubt that's whats in store ...

Defined
Just a slight improvement along the commodity chain for rice exports may well show how exporting can be assisted. Port authorities of Phnom Penh will waive storage fees for stored rice for a maximum of 18 days. So reports the Phnom Penh Post (Mar. 4).

However there are other ways as well. Not often does Cambodia set the rule for Vietnam. But in a recent interview with rice expert Vo Tong Xuan published in Vietnam News (Mar. 10) it appears that Cambodia is the example to follow for Vietnam:
'Last November, at the sixth International Rice Conference in Phnom Penh, Cambodia's rice was highly valued for its quality, even better than rice from Thailand. A key factor helping Cambodia to gain such a high reputation was support from the International Trade Centre (ITC) through a project to develop a rice trade mark.
Under the project, the ITC helped Cambodia to define a rice variety which has top quality. Next, the ITC supported Cambodia in building a most advanced rice mill and taught Cambodian farmers how to grow the special variety. In addition, the ITC helped eight Cambodian enterprises develop procedures on how to grow the rice.
However, Vietnamese enterprises do not to pay attention to developing their own trade marks. What they do is simply buy rice from traders. The Department of Trade Promotion doesn't have any policies to encourage enterprises to develop trade marks for Vietnamese rice'.
The Cambodian Rice Federation (CRF) though is not sitting on it's laurels. On Feb. 26 they mention that exporters will try to create a single export brand. The next day it also reports on how they would like to form export consortium's so as to upgrade export conditions and able to meet qualifications from major importers.
'They had also expressed the needs to enforce the CRF Ethical Code of Conduct to all exporters, whether they are members of CRF or not as the current “laisser faire” had led to abuses which have tarnished the image of the Cambodian rice and sent export price spiraling downward despite the very good quality of our rice'.
On March 5 oryza.com has a report on this, more or less as above.

They had also expressed the needs to enforce the CRF Ethical Code of Conduct to all exporters, whether they are members of CRF or not as the current “laisser faire” had led to abuses which have tarnished the image of the Cambodian rice and sent export price spiraling downward despite the very good quality of our rice. - See more at: http://www.crf.org.kh/?page=api_location_detail&id=864&lg=en#sthash.IVc0uA0r.dpuf
They had also expressed the needs to enforce the CRF Ethical Code of Conduct to all exporters, whether they are members of CRF or not as the current “laisser faire” had led to abuses which have tarnished the image of the Cambodian rice and sent export price spiraling downward despite the very good quality of our rice. - See more at: http://www.crf.org.kh/?page=api_location_detail&id=864&lg=en#sthash.IVc0uA0r.dpuf

Write offs
On February 26, the Bangkok Post mentions how the Bank for Agriculture and Agricultural Cooperatives (BAAC) will try to write off some debts:
'Proposed by BAAC, the guideline features writing off outstanding debts owed by farmers who were no longer unable to service debts or who passed away. It will also extend the debt repayment period for those who still have the ability to repay'. 
Oryza.com notes that Thai authorities prefer to lavish money on rice cooperatives: 
'Thailand's Ministry of Agriculture and Cooperatives is planning to allocate 6.5 billion baht (around $200 million) to support rice farmers' cooperatives to improve their business capabilities, according to local sources'. 
Luckily when the government will change there will probably be no trace of whether or not this money will have been spent wisely. Now that's a policy we like!

Marginal
Big news in Thailand. Farmers are not growing rice but watermelons. So says the Nation (Feb. 22). And though returns might return more swiftly the article also mentions that growing watermelons was not very profitable ... 
 
The success of just one industry body for rice in Cambodia has rubbed off on the cassava sector. Same same says Phnom Penh Post (Mar. 3). The problems faced are also the same: 
'He [Pang Vannaseth, director of Battambang’s Agricultural Department] added that while cultivation has been increasing yearly, the sector still faces many challenges such as unstable prices, a shortage of warehouses, and a lack of capital among farmers'.
More market problems, now for Lao cassava farmers. The Vientiane Times (Feb. 17) quotes Champasak provincial officials who believe problems are there to be solved. And their problems are to ask their cassava farmer to sell the crop outside of the province, possibly even Thailand. Thus the lack of working capital at the provincial processor will not be a problem anymore.

Lifeless
Just to show how powerless farmers are in Cambodia, the Phnom Penh Post (Feb. 23) notes that farmers farming land for over 30 years somehow have lost their rights and the land is being sold off as land fill.
'Some 100 farmers gathered at Banteay Meanchey Provincial Hall on Saturday to protest the actions of a company they accuse of excavating 50 hectares of their rice fields for soil, which it sells by the truckload, according to protesters and the rights group Adhoc.
Bearing signs that read “My land is my life”, protesters called for a halt to the activities of the company, which is owned by the deputy provincial military commander, Phlun Hong, also known as Phlun Dara. Villagers said the company told them it was digging a canal for irrigation, but maintained it had not told them beforehand.
...
Phlun Hong’s company was one of four businesses whose licences were revoked by the Ministry of Mines and Energy late last year. Contact information for the company was unavailable yesterday'.
Elevation
Finally an interesting article from the states on an answer to some of Southeast Asia's upland rice problems. The answer may be perennial rice? 
Yale university online magazine Environment 360 (Mar. 5) has an interesting report on the future of perennial rice. With having standing crop year round, erosion would be largely dealt with while it would result in much lower labour costs.
'By crossing domesticated rice with its wild predecessors, they hope to create deep-rooted varieties that hold soils in place, require less labor, and survive extremes of temperature and water supply.
...
Critics argue, however, that perennial grains like PR23 will never be able to feed the world’s growing population. Kenneth Cassman, an agronomist at the University of Nebraska whose work focuses on global food security, says devoting a greater share of the world’s limited agricultural research funding to perennial rice research would be a mistake. 
“The goal is not just to increase agricultural productivity, the goal is to lift people out of poverty and provide adequate nutrition and health,” says Cassman, who worked at IRRI in the mid ‘90s. “And there’s no way that low-yielding perennial grains grown on small, marginal farms can lift anyone out of poverty.” Instead, he argues that farmers should grow drought-resistant trees or pasture — not grains — on steep hillsides to stabilize soils, and scientists should focus on improving annual grain yields in environments that are truly suited to them, such as flat fields with adequate water.
Nevertheless, those involved with the perennial rice research in China say it could have global environmental implications'.