The past few weeks have resulted in less press for rice growing and rice exports regionally. It's probably because the Thai rice bubble has burst, the worst possible scenario for Thai farmers: pledges will go unpaid, prices are falling and there's going to be no alternative for the foreseeable future.
The scenario is now also resounding throughout the region. Thailand now lays claim to being the no. 1 world exporter once again. But that is thanks to the need of the Thai government to off-load it's deteriorating stocks. The source, so mentions The Nation (Mar. 24) is CP Intertrade. Based on figures of the first 2 months of this year it estimates that Thailand is back on top. It also notes that this comes at a price: lower prices for exporters.
Giving weight to this assumption, oryzae.com notes that the income for the extra amounts dropped by 10% ...
'Thailand has exported 696,558 tons of rice in January 2014, up about 20% from around 580,983 tons exported in January 2013, according to the Thai Country Chamber and Office of Import-Export Goods Standards. However, in terms of value, Thailand’s earnings from rice exports declined to around $376.51 million in January 2014, down about 10% from $416.23 million earned during the same period in 2013'.
And as could be expected, Thailand's gain is Vietnam's wane. Again oryzae.com (Mar. 3) mentions that Vietnam's exports are down by above 10% for January 2014. A solution to Vietnam's woes: to stock up and wait for better times, presumably after April ...
The lower prices are also affecting prices in Cambodia itself. Phnom Penh Post (Mar. 3) has an article
on the losses for Cambodia. With harvests already stored, it's mostly
the traders who will get stuck with declining stock value while having
lent money to purchase the stock. The article also adds a soothsayer:
'Exporters and rice millers should keep their fragrant rice paddy and wait until the supply in the global market declines, advised Srey Chanty, an independent economist who focuses on agriculture issues.“I think in the next three or four months, the fragrant rice price will bounce back to normal,” he said'.
Now I don't believe he will be
putting his own money in this thought ...
Such is the dire consequences that even the Bangkok Post sees the need to report on this (Mar. 3) quoting oryzae.com that prices for Cambodian rice had dropped by 7%.
And then today, the Phnom Penh Post notes an overall drop in rice exports from Cambodia:
'As Thailand sells its rice reserves and reforms in Myanmar are rewarded with more access to markets abroad, Cambodia’s total exports of milled rice are on the decline, falling more than 10 per cent in the first quarter of this year compared with the same period in 2013, according to industry insiders'.
Adding insult
As has been reported earlier in this blog, the EU are starting to flex their muscles trade-wise. Co-incidence or not, it comes after political uncertainty, have the rulers won the last election or not?
Next up are fish exports, so reports the Cambodia Daily (Mar. 24):
'The European Commission (E.C.) will today ban all fish imports from Cambodia, carrying through on its threat made in November to punish the country for failing to show genuine commitment to tackling the global problem of illegal fishing, according to a memo released Friday'.
Part of the problem seems to be lack of regulation.
Earlier in the month the EC also took aim at the sugar exports of Cambodia, though somewhat reluctantly it seems.
There does seem to be a direct correlation between the number of land-conflicts and the recent surge in exports (quadrupling) of sugar from Cambodia. And it does help that the government is now weakened.
The Cambodian side though is playing fair weather:
'He [Council of Ministers spokesman Phay Siphan] added that calls for the EU to use its sizeable aid as leverage on the government was not constructive.“No one is the master, we are partners … [with] a different culture and a different mindset. [But] it doesn’t mean that the government is not doing anything to improve that. We [work] daily to tackle the issues.”
More problems on the rice export horizon: hackers. The Phnom Penh Post (Mar. 21):
'Cambodia's rice industry has come under attack in recent months from online criminals attempting to defraud buyers and disrupt exporters’ websites, industry insiders say'.
