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'.