Fruition

Trade

Despite the poor progress of reaching Hun Sen's goal, it is noted that Chinese banks might just be willing to plough is some cash ($70 million?). PPP (27-08): 

'Son Kunthor, president of the Cambodian state-owned Rural Development Bank, told the Post that his Chinese counterpart proposed the establishment of $70 million in loans for rice milling, which would enable the production of between 270,000-450,000 tonnes of unmilled rice'. 

The bad news: 

'“This is their plan. We don’t know how much about it or if it will come to fruition, because first there are some conditions the government needs to ensure,” he [Son Kunthor] said'.

Hope to fulfil the dream is now heaped on Indonesia. An MoU was signed between Cambodia and Indonesia which would see 100,000 tonnes of rice head to Indonesia (PPP, 29-08). But ..., there's no timeframe, nor an exact amount. A respondent to the article questions the price to be received (higher than that of Vietnamese sourced rice?) as well as the shipping possibilities:

'how the rice will go to the port of loading ? as no vessel with rice was ever loaded in Sikhanoukville by any cambodian exporter . are these 2 gentlemen [Cambodia’s Minister of Commerce and Indonesia’s Trade Minister] on the photo asking themselves these questions'. 

Probably not. 

On the other end the Jakarta Post reports the signing on a non-binding agreement. An agreement meant as encouragement for Indonesian businesses to set up shop in Cambodia. It mentions the company Galuh Prabu Trijaya with extensive interests in fertilizer supplies. 

However background info on the company is scarce. Alibaba suggests 

'We are sole distributor of rice origin from Cambodian competitive price with Jasmine type and else We have hulled rice the best quality'. 

Quite.

Then the Jakarta Post (31-08) actually has an achievement to present:  

'Khy Thay Corporation, a Cambodian rice miller, said it was ready to ship up to 20,000 tons of rice to Indonesia starting this year and to buy Indonesian agriculture machinery valued at $380 million'.

Khy Thay? 

'Khy Thay is a family company established in 1930, which buys rice from farmers and sells it, husked or unhusked, to Thailand and Vietnam. The company oversees a farmers’ association with 1.2 million members, each of whom owns about a hectare of land'.

Hmmm, 1.2 million? Now I remember this figure. 

'Prabu Galuh Trijaya is the Indonesian partner of the Khay Thay Corporation'. 

But thinking practically: 

'Vietnam might try to squeeze out Cambodia, following its deal with Indonesia, by cutting short its sack supply,” Ika [ Prabu Galuh’s director] said, “This is a big opportunity for any Indonesian company to supply the sacks or even build sack plants here.”'

Finally back to China: 

'Cambodia expects to export around 300,000 tonnes of milled rice to China per year, Minister of Commerce Cham Prasidh said during the 44th ASEAN Economic Ministers Meeting in Siem Reap'. 

No idea as to when the expectations will be fulfilled, as reported by the PPP (30-08). 

Reality check.As an annually occurring event? The Phnom Penh Post (21-08) report Drought hits Cambodia. And then adds rice exports:

'The report [Econony and Finance Ministry’s review on the promotion of paddy production and rice exports during 2010-2011] listed expectations for 2012 to reach only 180,000 tonnes, equal to 18 per cent of the Kingdom’s 2015 export target of one million tonnes'. 

Reasons? Only a vague reference to drought-like conditions in the west of the country ...

Price surge?

ODI have forecast near-record level global rice production brought about by better monsoons over the Indian sub-continent. this may well imply lower prices, if ....

A sidenote on the price crisis. The Independent (01-09) notes that Barclays Bank made 500 million pounds on the futures market in the past years. Another company involved, Glencore, was quoted 

'... describing the global food crisis and price rises as a "good" business opportunity'. 

An official bank response: 

'The bank defended its actions, pointing out that trading in so-called futures contracts – an agreement to buy or sell a certain quantity of a product, at a given price on an agreed date – helped parties such as farmers and bakers to hedge against the risk of rising or falling prices. "Our clients include investment companies, food producers and consumers who, among other things, seek our help to manage risks"'. 

And whoops: 

'Barclays Capital analysts admitted in a note to clients in February that speculation did push up prices. Barclays said: "The second key driver is that commodity investors have begun allocating to commodities again after beginning 2012 heavily underexposed to the sector."'. 

A few days later (sept 5) the Independent quotes OXFAM as believing that climate change could well lead to more cereal price spikes in the future. Surprisingly all agencies quoted are calling for more investment in production. And here I was believing that strategic reserves would be the answer ... Now where did I read that rice prices were stable  for most of the year because of reserves/stockpiling in Thailand, India and China ...

Well, not in the following:

'The Asian Development Bank yesterday pointed out that Asean nations could help avoid world rice-price shocks by reducing export restrictions, placing less emphasis on self-sufficiency, retooling Thailand's rice-pledging programme and expanding coordinated rice policies with India and Pakistan.

Thailand is projected to return as the world's top rice exporter, but its pledging scheme, which guarantees farmers a higher-than-market price for their crops, provides disincentives to its exporters, resulting in the steady decline of rice-export revenues since late last year. As of May 28, exports were down by 43.1 per cent or 2.86 million tonnes, according to the ADB's working paper'. 

As reported in the Nation (31-08). 

Anyway, Cambodia has nothing to fear, come price surge and all; at least that was noted in the PPP (11-09): 

'Nina Brandstrup, FAO representative in Cambodia, said the high level should not be considered too dramatic'. 

And 

'“On balance, we are pleased that the food index remains stable, and expect it to turn down in the near future,” Peter Brimble, ADB deputy country director for Cambodia and senior country economist, said'. 

Oh well, so much for the concern about rising prices.

Follow the lead
Rice pledging. The Thai government seems to be convinced that it has signed deals worth 7.3 million tonnes (the Nation, 13-09). Only 4 million tonnes to get rid of, apparently. No word on the price agreed, so it is only guessing how much the scheme is actually costing the Thai taxpayer. 
The same source also reports the need to refinance the scheme. The Bangkok Post (13-09) simulataneously notes that the rice has been sold, but exporters believe that only 0,2 million tonnes have actually been sold. Suggestions are that if there were done deals these were at below market prices.

Meanwhile. Opposition in Thailand blames the government for falling agricultural prices (Nation, 23-08). Prices of rubber, palm oil fruit and coconuts have dropped considerably without the government able to do anything about it. 
That's how the economy usually works. 
The opposition though refrain from comment on the rice pledging; obviously farmers are getting better returns. The losses will befall to the government. But that is entirely a different matter.

Back on the ranch. The Bangkok Post (17-08) has an interesting article on a recent study of rural debt. Household debt levels are increasing 6% per annum, partly being driven by the government rice pledging scheme which is leading farmers to take out more credit to pay for farm inputs. As the lender is often informal, post-harvest there is often is a mis-match between achieved pluses minus the outstanding plus interest.

'The survey showed the government's agriculture measures did nothing to improve farmers' lives'.

So much for the heralded government input.

Wrapping up session

The ADB also contends that Laos will become a rice exporting nation, report by the Vientiane Times (7-09): 

'The Asean and Global Rice Situation and Outlook, which was released on the ADB's website recently, shows that Laos will be able to shift its status from rice importer to a minor rice exporter over the next 10 years, if it can maintain the growth rate of rice production above the growth rate of consumption'.

Hybrid rice; SL Agritech wants to expand from the Philippines big time. Their partner in Thailand would be Capital Rice to which SL Agritech will bequeath hybrid technology apparently without anything in return (source). 
Capital Rice make no mention of the link, but I do see that Capital are wanting in on the Cambodian market.

Nuts. Cashews. PPP (24-08) reports on cashew selling, by pointing out that Vietnam demands more nuts. Somehow demand is believed to be up, but prices are down. Not economics? Or poor reporting?