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'.

Friday, February 13, 2015

Seized

Reaping funds
The Cambodian Rice Federation (CRF) seems to be in the business of self-interest. The Cambodian Daily (Feb. 7) has this information on how the CRF hope to raise funds:
'The Cambodian Rice Federation (CRF) plans to borrow at least $400,000 for international marketing campaigns if it fails to meet its goal of raising $777,000 for the plans through imposing export fees on its members, the organization’s president said Friday at CRF’s annual conference.  
On Monday, the CRF voted to require its members pay an export fee of $0.50 per ton of long-grain white rice and $1 per ton of fragrant rice in order to raise the funds to educate local farmers and market Cambodian rice overseas'. 
Now does there need to be a marketing campaign? Or does the CRF have the authority to impose such a fee? And if so, would this not hurt exports? And how will the money be spent? 
The article then also has this info: 
'Also at Friday’s conference, Commerce Minister Sun Chanthol said the ministries of finance and commerce would borrow $300 million from China to build 40 warehouses and kilns for farmers to dry their rice.
“We will sign a [memorandum of understanding] with China Exim Bank soon, with leadership from the Finance Ministry,” he said.Mr. Chanthol said the move would help to avoid paddy outflow to neighboring countries such as Thailand and Vietnam.
A lack of industry capital in Cambodia has long left farmers unable to have their rice processed domestically for export, meaning that they miss out on adding value to their crop and are often pressured to accept lower prices offered by foreign traders'. 
Only to be offered lower prices by national traders?

With this being the year the Cambodian government has meant that it will export 1 million tonnes of rice, the Cambodian Daily (Jan. 19) takes stock. No secret that this export target will not be reached.
'According to an October economic update from the World Bank, significant gains were made in the ensuing years.
“[Cambodia’s] modern rice milling capacity (i.e. the larger mills) increased sevenfold, from 96 tons per hour (tph)…in 2009 to over 700 tph in late 2013,” the report says.
It adds that paddy production more than doubled from 2003 to 2013, from 4.3 million tons to 9.3 tons, and notes that Cambodia’s jasmine rice has been repeatedly named the world’s best rice by the World Rice Conference.
Another industry development came in May, when the country’s myriad miller and exporter associations united to form the Cambodia Rice Federation (CRF), electing Sok Puthyvuth, the son of Deputy Prime Minister Sok An and CEO of local conglomerate Soma Group, as its president.
Upon being elected, Mr. Puthyvuth said the two greatest obstacles to increasing exports were a lack of available funds and the quality of crops'.
However, dropping prices and intense competition have been of little assistance.
'But Cambodia still lacks the transport infrastructure, facilities and capital to guarantee the supply necessary for major trade deals, David Van, executive director of rice miller and exporter Boost Riche Cambodia, said last week.
...
The World Bank’s October report also notes that high fuel and electricity costs in Cambodia make milling 30 percent more expensive than in Vietnam and Thailand.
...
An area in which Cambodia has made particularly slow progress is in forming institutions to certify and test crops before shipment.
According to a report released last week by the Geneva-based International Trade Center, this was an impediment to trade for 89 percent of agriculture exporters in the country last year.
“Few agencies in Cambodia are capable of testing and certification of products for export,” the report says'.
Somehow this small piece of national news hardly registered in the Cambodian press. So from oryza.com (Jan. 29): 
'In a letter adressed to the Prime Minister, a group of opposition leaders noted that declining prices of rice, rubber and mung beans have been significantly impacting the lives of farmers'. 
The blame Thai and Vietnamese traders. Goevernment says they are doing their best. Politics.

In other national news Phnon Penh Post (Feb. 5) has this piece of business info:
'Local rice miller and exporter, QC Rice Company, signed a memorandum of understanding (MoU) yesterday with Chinese agricultural firm, Rizhao Rui Energy Trading Company, a partnership that will see the two businesses trade in rice and agricultural machinery.
The deal sees Rizhao Rui Energy Trading Company agree to import 250,000 tonnes of Cambodian rice from QC Rice, while the Cambodian rice producer has agreed to import $4 million worth of farm machinery from its Chinese partner'. 
Now I can understand buying rice and selling this into a market such as China, but does Cambodia really need the machinery supplied from China? And how can an industry cash-starved rely on the potential hope of selling a machine to ensure some cash flow?
Another hitch comes in the form of import restrictions for rice in China from Cambodia:
'China’s import quota of 100,000 tonnes of rice from Cambodia is something Kong [CEO of Rui Energy International] said the company would be seeking to lift in order to allow the 250,000 tonnes anticipated in the deal'. 
Note that neither company have a high internet profile ...

More substantive information. The Phnom Penh Post (Feb. 13) reports that organic exports of rice from Cambodia are in high demand:
'Organic rice miller CEDAC is aiming to double its exports this year as competition in the niche organic rice market heats up.
... 
CEDAC buys its organic rice for an average price of 1,650 riel ($0.41) per kilogram, as much as 50 per cent more than the 1,100 riel nonorganic rice farmers receive per kilo.
But CEDAC is not the only firm eyeing Cambodia’s organic rice market for rapid expansion.
Non-organic rice miller and exporter AMRU Rice in September signed a deal with eight farmer cooperatives in Preah Vihear province to purchase 2,500 tonnes of organic fragrant paddy rice for export to the EU and US markets'.
Free press
The hacks over at Bangkok Post (Jan. 28) have a very insightful article on the current status quo of rice trade in Thailand and also how  the former PM's recent impeachment due to irregularities in the rice pledging scheme is to blame. As is customary there, there's a lot of applauding the junta while deriding the previous democratic government.
Just some excerpts:
'The biggest exporter stockpiled 17.8 million metric tonnes after former prime minister Yingluck Shinawatra spent $27 billion since 2011 buying at above-market prices to aid farmers. The move threatened the nation's credit rating and helped fan months of protests'. 
Wrong, the protesters were personal, irrespective of whatever policy was or was not in vogue.
'Ms Yingluck was impeached on Jan. 23 for failing to heed warnings about the spiralling cost of rice subsidies, which the FAO said were unsustainable'. 
So if the FAO say they were unsustainable, then that must be true. What's more the former PM was impeached by a military junta whose sole purpose was to get her suspended from any future political activities.
'[Junta] Prime Minister Prayut Chan-o-cha is seeking to clear the warehouses without torpedoing the market, saying on Jan 26 the government wants to accelerate sales to reduce inventory costs while ensuring prices are acceptable'. 
Prices since have dropped by 35% thus resulting in a loss for government. But more importantly farmers are highly affected by this selling resulting in lower prices now.
'A decline in the quality of the stockpiles also may limit the impact of sales on prices, which reflect food-grade grain. An audit in 2014 found about 80% was substandard and almost 4% was poor quality, destined for non-food uses.
Most is still food-grade quality and can be sold as long as it's kept dry and fumigated, said Somkiat Makcayathorn, secretary-general of the Thai Rice Exporters Association'. 
So the former PM is impeached because of the findings of the government buying and storing rice with low quality. But they still are saleable as food. It can't be both?

Thai government wants to cut rice production so reports the Bangkok Post (Feb. 2): 
'Rough-rice output may be cut to 33.73 million tonnes by 2016-17, down from an average of 35.11 million over the past six years, according to Apichart Pongsrihadulchai, vice agriculture minister. Growers will be encouraged with incentives including soft loans to shift from rice to sugar cane or to mixed farming with livestock, Mr Apichart said in an interview'. 
This is again an ill-conceived idea. Farmers respond to price incentives and opportunity. If sugar growing were a viable alternative, farmers would have switched long ago. They aren't. And with sugar prices dropping, there will be precious few who will change. 
Add to the price problems, the poor post-harvest processing (trucks unavailable, long waits for factories) and overall incompetence which results in low pay-outs to farmers with little alternatives, well one can hardly blame farmers for noting wanting to change.

Hotline
Marketing problems galore.
A very strange article in the Bangkok Post (Feb. 9) concerning sales of rice berry, which I am lead to believe is something akin to black rice.
'A group of farmers who delivered their crops of a new strain of grain, Rice Berry, to a wholesaler but did not get paid have finally received the first down payment on their harvests'. 
The article then continues to note that despite the farmers not getting their money, local officials have managed to sell more of their crop and thus all is not lost. 
But the farmers were scammed, how is this positive news? 
All the hoopla: 
'Rice Science Centre then-director Apichart Vanavichit earlier said the new strains, Rice Berry and Sin Lek, were full of anti-oxidants, iron and magnesium substances based on a clinical test by Kasetsart University. The bran and bran oil of Rice Berry contained lupeol that could help prevent cancer cell development or even kill the cells, he said'.
In Laos there's an article from the Vientiane Times (Jan. 27) on the problems with the marketing of corn:
'Sweetcorn growers in the northern province of Huaphan are finally being paid for the crops they sold to a state food enterprise through a middleman, after months of delay.
Acting Director General of the Domestic Trade Department under the Ministry of Industry and Commerce, Mr Bounthiene Keosipha, confirmed the payments at a press conference recently.

He spoke to local media in response to a question raised through the telephone hotline of the recent ordinary session of the National Assembly.
Through the hotline, a corn grower had called for the authorities to push for payments amounting to 320 million kip for about 600 tonnes of corn, which farmers had sold to a middleman.
...
He [Mr Oudsy Vongkham,Deputy Director of the Industry and Commerce Department in Huaphan province] said a Viet namese company gave the money to the province's state food enterprise to buy the corn from farmers in Sone – a newly-built district in the province. The crop was destined for Vietnam.
The state food enterprise then contracted with a local businessman nicknamed Mr Khamtui to purchase the crop from local farmers.
“The businessman later gave the money to other middlemen to help with the purchase of the crop, but those men didn't pay the farmers,” Mr Oudsy said, adding that the corn was sold last fiscal year.
After learning about the problem, the department contacted police officials in charge of economic affairs, asking them to look into the matter and identify the responsible parties.
Mr Khamtui has now had his assets seized in a bid to accelerate the payment of the outstanding money to farmers and this is now being carried out'.
Tackling
To corner the rubber market, Thailand needs to get an agreement with Malaysia and Indonesia. The Nation (Jan. 31):  
'PRIME Minister Prayut Chan-o-cha told Malaysia yesterday that a tripartite meeting should be held as soon as possible between Thailand, Malaysia and Indonesia to find urgent ways to tackle the falling price of rubber'. 
It's so strange, the former Thai government had an ill-conceived plan to corner the rice export market, fails and then is seen as criminals for trying. Current government does the same, the new heroes?

Cambodia Daily (Feb. 6): 
'Cambodia’s rubber export volume increased by about 33 percent last year compared to 2013, while the value of rubber decreased by about 9 percent during the same period, according to figures released by the Ministry of Commerce on Thursday.
...
Ly Phalla, who heads the Agriculture Ministry’s general directorate of rubber, said the increase in exports last year was likely the result of plantations hurrying to offload their excess stock'.

Tuesday, January 13, 2015

Ingenious

There's really not much to mention in this update ...

All clear
For instance there's the boring news from Thailand: how is the junta trying to tackle the former government?
Bangkok Post (Dec. 19):
'The National Anti-Corruption Commission (NACC) has cleared senior Democrat Party figures of wrongdoing in connection with rice sales made in 2009 when the party led the government'. 
The Nation (Dec. 22):
'Former Deputy Commerce Minister Yanyong Phuangrach yesterday voiced doubt over results of the government's audit of the rice-pledging scheme, saying they appeared to have been gravely distorted and that granary owners and surveyors should sue the panel in charge of verifying the state stockpiles'.
The Nation (Dec. 28):
'The director of the Marketing Organisation of Farmers (MOF) has been summoned to explain to the government's newly-established National Administrative Centre against Corruption tomorrow about the disappearance of over 100,000 sacks of rice from the government stock'.
Bangkok Post (Jan. 5):
'Attempts to clear the debts incurred by the rice-pledging scheme continued on Monday with the launch of 100-billion-baht bonds by the Finance Ministry and the Bank for Agriculture and Agricultural Cooperative (BAAC)...'.
Bangkok Post (Jan. 12):
'An inquiry committee set up by the National Legislative Assembly (NLA) to question former prime minister Yingluck Shinawatra about the NLA's impeachment motion is expected to focus mainly on the losses under the rice-pledging scheme'.
Cleaning their hands already?

Pressure
While rice farmers see some hope in the current Thai regime, rubber farmers remain dissatisfied (Nation, Dec. 15):
'The rubber industry will today ask the government to compensate farmers for a market price below Bt60 per kilogram after initially seeking compensation for prices below Bt80.
The news comes as the government has revealed that it believes a planned rally by rubber farmers in Phatthalung on Friday in response to falling rubber prices is not an attempt to put pressure on the government but merely an information-gathering exercise.
Domestic rubber prices range between Bt35-37 per kg compared to a peak of almost Bt180 over the past few years.
"If the rubber market price is Bt45 per kg, the government will have to compensate farmers for the Bt15 gap. If the price is Bt60 or higher, the government has no need to subsidise," said Manoon Ouppala, chairman of a network of rubber planters in Surat Thani'.
Meanwhile, pepper farmers are doing well, thank you. The Phnom Penh Post (Jan. 6): 
'The price of black pepper rose from $11 per kilogram in 2013 to $15 this year, while red pepper increased from $15 to $25 and white pepper went from $18 to $26, said Nguon Lay, president of the Kampot Pepper Promotion Association.
“The total harvest is expected to be 40 tonnes, while the total cultivation area has increased from 15 to 20 hectares,” said Lay.
Lay said that a lack of supply to keep up with demand was the reason behind the surge in prices'.
Pepper farmers may be the exception to the rule. In Laos, with prices of agricultural commodities going down, agro-industries are also feeling the heat. Vientiane Times (Jan. 6) reports on cassava farming near the Lao capital.
'Pakngum district Governor Mr Vongdeuan Bounnhaseng told Vientiane Times yesterday, “Farmers here have abandoned the cultivation of cassava and are now planting rubber trees instead.”
Farmers in more than 10 districts of Vientiane and nearby provinces had been growing large areas of cassava in recent years to supply the tapioca factory in Pakngum district, which has the capacity to produce 320 tonnes per day.
But their luck ran out when the company ran up a massive debt to the bank that had given it a loan, and was unable to pay farmers for the cassava they supplied'. 
An answer may be niche marketing. In practice, Vientiane Times (Jan. 3):
'As the main producer of khao kai noi rice in Laos, Xieng Khuang province is not only eyeing up more domestic markets, but also plans to expand into foreign markets.
The province is encouraging farmers to grow more khao kai noi rice using organic methods, hoping to attract the interest of consumers in Japan and France.
According to provincial authorities, prospective purchasers from France and Japan have visited the province to look into the situation ...'.
Smelling a rat?
Achievements in growing hybrid rice are sometimes marginally better than those grown normally. So why not shift the focus elsewhere?
One of the biggest threats to rice productivity are rats. Especially in south Vietnam where rice is grown year round, rats can gobble up as much as 20% of the intended harvest. So it's no surprise that rat catching is big business.
The Bangkok Post (Dec. 19) has a very informative article on what they name Vietnam's rat king, Tran Quang Thieu. Mr. Thieu had developed his own trap with a powerful spring. the article mentions that 30 million of these traps have been sold.
'His five children have all joined the family business and between them they now run six specialised companies to trap rats.
... 
... he's signed contracts to help hospitals, hotels, restaurants and schools to exterminate pests - even the Hanoi police headquarters.
"Once, we trapped some 300 kilos of rats in just one night at a tourist resort in Hanoi," he said proudly.
Over the last few years, the rat population has exploded in Vietnam due to a decline in the population of their natural predators - snakes and cats'.
A very interesting read on domestic ingenuity.