Safety

Quite a lot to share this time round, so without any due, let's see what IRRI (Dec. 18) has come up with:

'After rigorous biosafety assessment, Golden Rice “has been found to be as safe as conventional rice" by the Philippine Department of Agriculture-Bureau of Plant Industry. The biosafety permit, addressed to the Department of Agriculture - Philippine Rice Research Institute (DA-PhilRice) and International Rice Research Institute (IRRI), details the approval of GR2E Golden Rice for direct use as food and feed, or for processing (FFP).

Reading the full press announcement, one notices that the Filipino procedure was just a formality it seems, If countries such as Australia, Canada, US and NZ have already verified the product, why should the Philippines lag? 
Because the prior mentioned countries will probably never ever consume the product, so their verification was easy. as suspected their approval opens the door for more approvals without carrying out significant checks. Just another step in failing to openly  discuss the strategy of giving GMO rice approval.

Range

Onwards.

There seems to be problems concerning prices on offer to farmers. The Phnom Penh Post (Dec. 11):

'Prime Minister Hun Sen on Wednesday appealed to rice millers and paddy buyers not to lower prices and to secure better rates for farmers facing difficulties in the early harvest season.
The Cambodian Rice Federation (CRF) said the low prices were due to an influx of poor quality paddy in some areas'.

It doesn't seem to have helped. VOA (Dec. 20) entirely objectively notes this:

'The Cambodian Agriculture Ministry rejected criticism circulating on social media about farmers getting low prices for their rice in the paddy-producing provinces of Battambang, Pursat and Banteay Meanchey.
The ministry released a statement on Tuesday claiming that farmers receiving low rice prices were selling poor quality rice and that prices were still within an acceptable range. Ministry officials were also working with rice mills to procure as much rice as possible from farmers.
...
However, Yaing Saing Koma, an agricultural expert, said that rice prices were low mainly because rice export to European Union is declining.
The rice export to the EU has dropped from around 170,000 tons in 2018 to 120,000 tons in 2019 for the first eight months, according to representatives of rice millers. The rice sector was also hit with tariffs for exports to the European Union earlier this year, after Italy triggered safeguard mechanisms.
“The rice exports to the EU are dropping badly so it affects the profit of the rice milling companies. They are afraid to stock a lot of rice for export,” he said.
Earlier this month, the Cambodia Rice Federation said it needed $200 million in working capital to buy rice from the farmers on account of shrinking loans available in the financial sector, with government allocating only $50 million of the required capital'.

As above, the purchasers have said it's not their fault. The Khmer Times (Dec. 20):

'The Cambodia Rice Federation (CRF) has fought back against claims that the current price of paddy is too low to sustain farmers’ livelihoods.
“Despite what people are saying on social media, the price of paddy has not decreased below market price. The current price is acceptable for farmers,” said CRF president Song Saran.
CRF comments follow viral posts on social media platforms claiming the current price level is insufficient to make a living.
...
He also suggested that the drop in the price of paddy may be the result of farmers planting lower quality varieties. He called on farmers to focus on “purer” rice types'.

A bit strange, this blame game. Surely if prices are lower, then this also spells better times for poorer citizens? A double edged sword?

Fortified
More then on the above mentioned loan scheme. The Phnom Penh Post (Dec. 8):

'The state-owned Rural Development Bank (RDB) has announced that it will distribute $50 million in loans to private rice millers to sustain the paddy market for farmers.
The Cambodia Rice Federation (CRF) said the funds will be used to purchase nearly 300,000 tonnes of paddy during the post-monsoon harvest season, which ends at the beginning of next year.
The additional loans come after the CRF asked the government to provide $200 million in loans to rice millers late last month.
...
RDB CEO Kao Thach told The Post last week that capital shortage in the rice sector is between $200 million and $250 million. To help remedy the issue, he has called on commercial banks to lend more to the sector'.

Then some news on lesser rice related news from Khmer kingdom. The Phnom Penh Post (Dec. 9) looks at the evolving Chinese market:

'China has granted an additional 18 Cambodian rice millers approval to export rice into the country, bringing the total to 44, the Chinese Embassy in Phnom Penh said on Friday.
The additional rice exporters will help the Kingdom achieve its 400,000 tonne quota of rice to China starting next year, it said.
Cambodia Rice Federation (CRF) vice-president Chan Sokheang said China’s decision comes after a CRF proposal to increase the Kingdom’s rice production capacity to supply the Chinese market.
...
According to an official report, in the first 11 months of this year, international rice exports totalled 514,149 tonnes. This was a 3.4 per cent increase compared to the same period last year, at 497,240 tonnes.
China was the Kingdom’s leading export market in the first 11 months of this year, with 195,242 tonnes. The EU imported 174,397 tonnes and the Asean region 69,239 tonnes. The remainder was exported to Africa and other destinations'.

Other markets. Phnom Penh Post (Dec. 3) on South Africa:

'Milled rice exporter Mekong Oryza Trading Co Ltd signed an export memorandum of understanding (MoU) with companies from Hong Kong and South Africa in Phnom Penh on Tuesday'.

Then concerning Nigeria, the Phnom Penh Post (Dec. 16):

'A Nigerian investor is looking to directly export rice from Pursat province to the west African country, citing the quality of Cambodia’s milled rice.
The investor’s representative, Mustapha Sammy Yaacob, the chief operating officer of SNZ Engineering Sdn Bhd, raised the subject at a meeting with Pursat provincial governor Mao Thonin on Sunday'.

Other snippets. Phnom Penh Post (Dec. 8) looks at contracts:

'Contract farming between community producers and rice millers or buyers brings growers great benefits, with an expanded market and more favourable prices, industry insiders have said.
Contract farming refers to an agreement between a company and an agricultural community regarding prices, quantities and standards of quality.
Signatures of Asia Co Ltd chairman and CEO Chan Sokheang told The Post on Thursday that contract farming in the paddy production sector would bring better prices for farmers than the market and ease concerns about market shortages and price fluctuations.
...
Signatures of Asia currently has contracts with 30 communities – consisting of nearly 4,000 families – in Preah Vihear, Banteay Meanchey, Stung Treng, Kampong Speu and Mondulkiri provinces, Sokheang said.
He said the high-quality phka malis paddy cost his company between 1,030 and 1,080 riel ($0.25 and $0.27) per kilogramme when bought from one such community on Thursday, while organic paddy goes for between 1,450 and 1,700 riel, which is slightly down on last year'.

Finally, the last bit on Cambodia's rice, the Phnom Penh Post (Dec. 19):

'The UN’s World Food Programme (WFP) announced its collaboration on Thursday with a Cambodian company to provide rural students with micronutrient-enriched school meals.
The partnership will see the WFP and Green Trade Company blend fortified rice kernels with Cambodian white rice to support the school meals programmes organised by the Ministry of Education, Youth and Sport'.

Odd, this, as me thinks that this renders Golden Rice obsolete?

State

Thailand has some rice related concerns. Quality?  Bangkok Post (Dec. 1):

'Failing to win the prize as the world's best fragrant rice for two consecutive years has come as a wake-up call for Thailand to overhaul its research and development into Hom Mali rice varieties to catch up with the changing global demand for fragrant rice.
After winning the contest for five consecutive years, Thailand's Hom Mali (jasmine) rice was beaten last year by Cambodia's fragrant rice and this year by Vietnam's ST25 variety.
"It's about time that both the government and the private sector joined hands in a more serious effort to improve the quality of Thai rice to meet the global market's expectations," said Charoen Laothamatas, president of Thai Rice Exporters Association'.

Overall rice production is down.  Bangkok Post (Nov. 28):

'Thailand's annual paddy production for both the main and second crops is forecast at 27-28 million tonnes in the 2019-20 season, weighed down by a drop in production for the second crop because of flooding and drought.
Whichai Phochanakij, director-general of the Internal Trade Department, who on Wednesday chaired a meeting of the subcommittee handling reference prices for rice price guarantees, said paddy output from the second crop is estimated at just 3.5 million tonnes, down 54% from 7.75 million tonnes the previous season, due to drought and inadequate water supply from dams'.

The Nation (Nov. 28) notes how the government is sugar coating their rural policies:

'Speaking after a meeting with the rice price guarantee committee, the Department of Internal Trade’s director-general Wichai Phochanakit revealed on Wednesday (November 27) that 90 per cent of the rice grown in crop year 2019/2020 had been harvested, but the volume had decreased drastically due to drought and floods'.

More or less what the Bangkok Post (Nov. 25) previously reported on:

'The government has set aside 70 billion baht to shore up paddy prices, as the annual harvest is scheduled to flood the market this month.
Whichai Phochanakij, director-general of the Internal Trade Department, said the latest meeting of the subcommittee handling national rice policy and management chaired by Commerce Minister Jurin Laksanawisit last week approved the schemes worth a combined 70 billion baht'.

Back on the prices subjects. Neighbour to the north (Laos) is also concerned, but to the opposite: rising prices. Phakhaolao reports (Nov. 14):

'The total yield is expected to be about 3.5 million tonnes – a downward slide from the original target of 4.4 million tonnes. Rising prices, shortages and storage issues, including difficulties in procuring rice, are worrisome for both the people and the state'.

Laos works outside world market (or nòt) thanks to their love of sticky rice. 

Derailed

Continuing on the same theme (what's happening with the neighbours), there's the never ending story of cleaning up your act. In this case is it acceptable to use what are increasingly believed to be harmful substances while maintaining you product is pure nature itself?

Concrete, use of paraquat, glyphosate and chlorpyrifos are to be axed in Thailand. Or not? Because this is after all Thailand, where anything goes.

Bangkok Post (Nov. 24) starts off:

'Opposition to the state's ban on three harmful herbicides looks set to escalate as farmers gear up to defy an order to hand over the chemicals to authorities amid plans for a rally on Tuesday.
The prohibition against the trade, use and possession of paraquat, glyphosate and chlorpyrifos -- announced late last month by the National Hazardous Substances Committee (NHSC) -- will take effect from Dec 1 but opponents are challenging its enforcement and have refused to follow orders as the deadline draws near'.

It works. The Nation (Nov. 27):

'Yielding to pressure from farmers and distributors, a government-established committee has recommended a six-month delay in the planned ban on hazardous agrichemicals paraquat and chlorpyrifos and limited continued use of a third, glyphosate.
Industry Minister Suriya Juangroongruangkit said on Wednesday (November 27) the Hazardous Substance Committee he chairs voted unanimously to postpone the ban on two chemicals and allow continued use of the third. 24 committee members casted their votes while 5 were absent.
The committee had on October 22 recommended that all three be banned.
The Department of Agriculture announced in the government gazette on November 18 that the bans would take effect on December 1.
But Suriya declared on Wednesday the ban on paraquat and chlorpyrifos would be postponed to June 1 and “the use of glyphosate will follow the commitee's guideline annouced back on May 23, 2018”'.

Then the confusion. The Bangkok Post (Nov. 28):

'Public health authorities insisted on Thursday that the National Committee on Hazardous Substances neither lifted nor eased a ban on three toxic farm chemicals, as Industry Minister Suriya Juangroongruangkit had said.Permanent secretary Sukhum Karnchanapimai and other senior health officials held a press conference at the ministry in Nonthaburi province on Thursday to refute Mr Suriya's announcement.On Wednesday Mr Suriya told journalists at the Industry Ministry that the new National Committee on Hazardous Substances had decided unanimously that day to lift the scheduled ban on the herbicide glyphosate and delay the ban on the herbicide paraquat and pesticide chlorpyrifos for six months from Dec 1'.

So despite no decision having been taken, a decision has been taken. Huh? Bangkok Post (Nov. 29) notes what's happening:

'BioThai, an anti-farm chemical pressure group, has alleged that "four major forces'' were behind the decision to scrap the ban on the herbicide glyphosate and delay the prohibitions against the herbicide paraquat and pesticide chlorpyrifos.
BioThai (Biodiversity & Food Sovereignty Action Thailand), which campaigned to have the chemicals banned, published an article titled "Analysis: 36 Days to derail the ban on glyphosate'' on its website on Thursday.
The group claimed the decision to derail the ban was the result of a joint effort by a Thai animal-feed producer, a group of herbicide producers, and two political parties in collusion with US entities'.

The Nation has more on this briefing.

Bangkok Post (Dec. 4):

'The Agriculture and Cooperatives Ministry still has no idea how it will handle three controversial toxic farm chemicals pending an official direction from the National Hazardous Substances Committee (NHSC).
Agriculture and Cooperatives Minister Chalermchai Sri-on said on Wednesday that NHSC had not sent its official resolution from its Nov 27 meeting that reviewed a proposed ban on the herbicides paraquat and glyphosate and the pesticide chlorpyrifos.
When reporters asked Mr Chalermchai what his ministry was doing with the three toxic chemicals, he said he could not relay any instructions to any organisation under his supervision pending the official conclusion from the national committee'.

Green

Phnom Penh Post (Dec. 10) has a message on an overall trade issue:

'Two more provinces have been allowed to issue the certificate of origin (CO) Form D which makes it easier for exporters to apply from their locations. In future commerce departments in each province will carry out this function.
...
With provincial departments of commerce now being able to issue the form, the application process for a CO will take just 16 hours compared to 10 days to two weeks if applied at the ministry in Phnom Penh'.

Then to the fruits. The Phnom Penh Post (Dec. 1):

'Official mango exports from Cambodia to China could begin as soon as the beginning of next year after visiting experts concluded that the fruit grown in the Kingdom is of good quality.
Officials from the General Administration of Customs of the People’s Republic of China (GACC) visited the Kingdom on November 24 to inspect Cambodian mango cultivation and determine whether to approve exports.
...
Vann Rithy, general manager of Angkor Mango, a mango buyer and exporter, on Sunday said that China is a large, high-demand and high-value market, and that official exports would greatly contribute to the growth of Cambodia’s economy.
The Kingdom’s mangoes are currently exported to China informally through Vietnam and Thailand.
“When official mango exports to China receive the green light, Cambodia will see a lot of benefits, particularly in regard to prices.
The previous need to export through neighbouring countries led to lower mango prices,” Rithy said.
He said the Kingdom would not be able to produce enough mangoes to meet the increased demand, but that yields are set to increase significantly as the approval of exports would encourage farmers in most provinces to plant more mango trees.
Chhay [Ngin Chhay, director-general of the General Directorate of Agriculture at the Ministry of Agriculture, Forestry and Fisheries] said there are currently around 60,000 to 70,000ha of mango plantations in the Kingdom'.

The Khmer Times (Dec. 20) chimes in:

'Mangoes could be one of the main agricultural products from Cambodia to be exported to foreign markets, providing high hopes for their current untapped farming potential, the government says, adding the sector is ready for new investment.
There is big scope because there are more than 100,000 hectares of land planted with the sweet, juicy fruit, which translates to at least 1 million tonnes harvested each season.
However, only a small percentage is currently exported because of poor facilities and technical knowhow for planting the trees.
...
Currently, mango fruits from Cambodia are exported to France, Spain, and Russia, Hong Kong, Thailand and Vietnam.
Last year, Cambodia exported about 50,000 tonnes of fresh mangoes to foreign markets, most of them shipped to Thailand and Vietnam.
South Korea will become a new market for mangoes by early next year, while the exporting company is working to progress the business as fast as it can'.

Phnom Penh Post (Nov. 20) on banana's:

'Yellow banana exports to China have grown since April when the Ministry of Agriculture, Forestry and Fisheries announced that the fruit can be exported directly without relying on Vietnam as an intermediary, Longmate Agriculture Co Ltd director Hun Lak said on Wednesday.
He told The Post that besides expanding its exports to China, his company is seeking to export to Japan, South Korea and the Middle East.
“In Cambodia, the climate is favourable [for yellow bananas]. It is hot and humid, and the soil is fertile and well suited to the cultivation of bananas.
...
He said Cambodia exports an average of 60 containers of bananas a month to China at a median price of between $550 and $600 per tonne.
“We have officially received approved exporter status because Chinese customs authorities and companies recognise our banana standards,” he said.
So far this year, the Kingdom had exported 127,459 tonnes of yellow bananas to China since official direct exports to the Chinese market were authorised, a report from the ministry’s General Department of Agriculture said on Friday.
According to data from the General Department of Agriculture, from the third quarter of last year, three major yellow banana farms existed in Cambodia. They are located in Ratanakkiri, Kratie and Kampot provinces and have a total area of 4,996ha – all for export'.

The Phnom Penh Post (Dec. 19) on coconut, a very overlooked crop. China seems interested:

'Coconut Palm Group Co Ltd is planning to invest in coconut plantations and set up a factory in Cambodia to produce fruit juice, said its general manager Zhao Bo at a recent meeting with Minister of Agriculture, Forestry and Fisheries Veng Sakhon.
The company is the biggest natural plant protein soft drink producer in China and specialises in processing tropical fruits such as coconuts.
...
The ministry said in 2016, coconut was cultivated on a total of 16,935ha in Cambodia, mainly in Preah Sihanouk, Kampong Speu and Kampot provinces.
...
Zhao said the Coconut Palm Group, located in Hainan, has annual revenues of $400 million and uses 600,000 coconuts a day in its production. The company also employs 6,000 workers and exports its juices to 38 countries.
The company, he said, was established 31 years ago, and in 2016, it paid 603 million yuan ($86.2 million) in taxes – 201 times more than it did in 1985. “Our company’s development has helped to promote the tropical fruits planting industry in Hainan,” Zhao said'.

Drop
Last chapter, ag issues in the wider region. Just a pair.
Phnom Penh Post (Dec. 15) reports on Vietnam's fruit trade:

'Vietnam’s fruit and vegetable exports dropped 0.6 per cent year-on-year to $3.5 billion in the first 11 months this year, data from the Ministry of Agriculture and Rural Development (MARD) shows.
The drop was attributed to falling earnings from dragon fruit, which accounted for 31 per cent of total fruit exports, (down nine per cent), durian (down 17.4 per cent), coconut (down 35 per cent), longan (down 56 per cent) and watermelon (down 26.4 per cent)'.

Phakhaolao (Nov. 14) sees problems with the Lao coffee production:

'Champassak is suffering the effects of a 28 percent decrease in the price of coffee exports compared to last year, with the price now standing at 1,800 kip per kilogram compared to 2,500 kip. The province's Industry and Commerce Department said that in the first nine months of this year 17,993 tonnes of coffee was exported, a drop of 28 per cent compared to last year'. 

Odds and ends

Stacking the odds

The big news is that the new Thai regime has started to count the rice. In stock. The Bangkok Post (July 3): 

'Nationwide checking of the government's rice stockpile began on Thursday amid allegations of corruption in the Yingluck Shinawatra administration's rice-pledging scheme, and to allow for planning of future rice management'.

One problem I foresee is that the stockpiling and reporting will take an immense time: time enough to cook the books either way ..... 

 Suits sorting the (rice) scheme out (source).

The Nation (July 5) has some preliminary findings. As expected there was bad rice. More surprising was the fact that they also found 

'disorderly stacking of sacks'. 

Bangkok Post (July 5) gives us a blow by blow account: 

'Disorderly stockpiles, deteriorating quality, inconsistent IDs on sacks and mixed grades of rice are among the problems that have emerged on the third day of the nationwide inspection of state rice stocks'.

A day later the Nation continues with the listing of discrepancies. Unfortunately, there's no reference to what degree this affects the total warehoused stock nor whether the amounts stocked were  as expected.

Well, two days later (July 7) the Nation mentions that in 1 province 90,000 tonnes were 

'missing'. 

But not too revealing. 

The Bangkok Post (July 8) then goes on to reveal that  the 

'woes' 

are spreading! It also holds this sentence: 

'According to criteria set by the inspection team, a police complaint can be made only when more than 5% of rice is missing from stocks, ML Panadda said, adding that a check at one warehouse found about 7% of the rice was unaccounted for'. 

So if you make away with 4.9% you're still in the right with the police, strange.
What's in store for the culprits? Bangkok Post (June 25):

'A court has sentenced rice trading tycoon Apichart "Sia Pliang" Chansakulporn to three years in prison for embezzling state rice in 2007

...

In June 2007, the Commerce Ministry's Department of Foreign Trade authorised President Agri Trading Co to improve 20,000 tonnes of white rice from 5% to 100% quality, before the grain was due to be shipped to Iran. But the company failed to deliver the improved rice to a port where Iran had sent a cargo ship to pick it up.

...

According to the court ruling, the company and the defendant were found to have embezzled 16,400 tonnes of 5% white rice worth 175.4 million baht'.

Murky.

The latest news is that in Phichit nearly 47,000 tonnes is missing (Bangkok Post, July 20)

Handsome

Cambodia's rice export a big task so says the Phnom Penh Post (July 4):

'The pace of Cambodia’s rice exports are expected to slow this year. Unable to maintain the steady rate of previous years, the export volume for the first half of 2014 is much the same as it was this time last year.

At the end of June, milled rice exports had reached 178,000 tonnes for the year, barely above the 176,000 exported for the first six months of 2013.

And with the government’s looming target of 1 million tonnes exported in 2015, the trend suggests it will be a difficult goal for the industry to reach'.

Phnom Penh Post has an article (July 9) based on a report by Oryza:

'Cambodia duty-free rice exports to the European Union have this week come under fresh attack from producers in Italy, who say the beneficial treatment is restricting the potential of Italian rice exports.

An Italian agriculture collective of farmers, which includes representatives from the Italian Association of Rice Industries, will protest in some of Italy’s largest rice-growing areas, according to a July 7 report by rice industry publication Oryza.

The cause of the uproar, says Oryza, is the preferential treatment Cambodia receives under the European Union’s Everything But Arms scheme, which allows tax-free access to EU markets for all states on the UN’s list of least developed countries, which includes Cambodia. Italian rice producers say cheaper Cambodian imports create an unfair playing field for their products.

...

The acting secretary-general of the Cambodia Rice Federation, David Van, responded to the concerns of Italian farmers in an opinion piece published in the Post on Monday.

Van said Cambodian exports had merely replaced those from countries, such as Thailand, that exported less than before. Therefore, he said, market pressure on Italian farmers would have changed little from previous years.

Van said that one of the more popular Cambodian grain varieties – jasmine rice – was grown very little if at all in the EU, thus creating room for exports from the Kingdom to meet demand'.

Cambodia though is not the only country to suffer from knee-jerk reactions, Myanmar is also been targeted (Oryza, 17 July).

Companies based in the more freer world and hence forced to be accountable to the general public are increasingly being targeted for the lack of environment and/or HR standards when operating elsewhere, in Cambodia f.i. Phnom Penh Post notes (July 7) that ties between Australia's ANZ bank and the Phnom Penh Sugar Company have been severed.

The severance comes after an ANZ audit revealed that

'... from 2010 to 2013 the company failed to address 60 per cent of recommendations made by Bangkok-based auditor International Environmental Management, including ones related to worker health and safety'.

But damned if you do, damned if you don't: 

'“As a major financier of the sugar project, which has no doubt profited handsomely from it, ANZ has a duty of care to the people whose land was grabbed and that duty does not go away when it recalls its loan,” David Pred, managing director of Inclusive Development International, said'.

Nonchalance

More rice market news, Thailand believes that production will dip this year, so reports the Nation (July 9). That's due to delayed rains. Note should also be made of lower plantings as subsidies have disappeared. 

There seems to be confusion regarding the measures which India will take to soften domestic inflation. They have announced that they will be using as much as 5 million tonnes of their stockpile to amend the domestic situation. Phnom Penh Post (June 25) notes that

'Cambodia’s rice producers fear that any spillover into the global rice trade may impact local exports'. 

If any impact, it would mean less rice in the international market, thus higher prices, thus more demand & higher prices for Cambodia. No fear.

That's illustrated by the Oryza index of rice prices which has been notched around the 450-475 $US for the past 3 years.

However over at IRRI (July 14), they regard this as foreguard of the next storm:

'On the surface, rice markets remain calm and stable, but underlying market sentiments are rapidly changing because of weather disruptions in many rice-growing nations. The global rice market faces the possibility of a production shortfall in the major rice-growing regions in South and Southeast Asia and also in China because of El Niño events. So far, the market has been quite nonchalant about this possibility because of large buffer stocks in key rice-growing countries. Global rice stocks, at least on paper, have increased by 36−80 million tons since the rice crisis in 2007 (USDA: 36 million tons; FAO: 80 million tons). However, the majority of these increases in rice stocks have occurred in three countries (India, China, and Thailand) and they have largely been held by the state agencies'.

That is disconcerting. As illustrated above Thailand's state storage programme seems to be less so.

The authors believe the key maybe public policies in India:

'If India remains open for business, the rice market will behave rationally and prices will be determined by fundamental factors. However, if India imposes any export restrictions, particularly quantitative restrictions, then the market might panic'.

Funny, if the reason for impeding storm is the lack of public storage on a global scale, why not advocate this instead of singling out a triggering situation ....

Meanwhile in Lao

As if Laos has no experience in growing rice without any external inputs, the Vientiane Times (July 7) reports that a Chinese company will now produce organic rice in the people's democratic republic: 

'A large Chinese company plans to grow organic rice in Laos for export to markets in China and Europe.

Chief Executive Officer of SEIF Holdings Mr Frederick Tan and his delegation met with Deputy Ministry of Agriculture and Forestry Dr Phouangparisak Pravongviengkham in Vientiane on Friday, where the company detailed its plans to invest between US$300 million to US$1billion in growing rice in Laos.

He informed Dr Phouangparisak the strategy of the venture with the company initially targeting Vientiane and then the two provinces of Borikhamxay and Champassak for its operations.

“Laos is suitable and it's very good for growing organic rice crops as the soil is not contaminated and the air is clean,” Mr Frederick Tan told Deputy Minister Dr Phouangparisak'. 

On the bounce

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'.

Grumpy Faces

What goes up, must ...

The previous entry on this blog came on what then seemed a defining moment in Thailand's rice-pledge system. Apparently the pressure had become too much for the sitting government and in spite of all their assurances to the positives of the the rice-pledging, it was thought to bring pledge prices in line with world market prices. Instead of the other way round.

Well as could be expected, farmers were livid: Happy hour to end? We think not! Farmers were to take to the streets. And in Thailand governments futures have been determined by street protests in the latter years. So a new move was needed.

So the expected move was to turn back the drop in rice-pledge price (Bangkok Post, June 30 / July  1, The Nation, July 1)!

However, now some question the governments credibility: this week you are compelled to act in manner a, the next you do the opposite (Bangkok Post, July 1).

And then in November we are to expect that the prices might drop again (Nation, July 3) ...

The same source (July 5) notes that meetings will take place on forehand though. But how will farmers opinions align itself with those of traders and the government wanting to have lower prices? 

One option (though not achievable) I believe would be to let the Thai currency go bankrupt, due to over-excessive government spending (not so difficult). This will result in lower exchange rates and higher inflation. If in the meantime the pledge price remains the same, ergo the problem will resolve itself, everybody will be back to pre-rice pledge times ....

Well if the price is not to move, more will be needed to be done to increase returns / stem losses.

The former: more efforts would be made to sell the pledge produce sooner; thus the pledge price becomes a de-facto export subsidy. The Thai government wishes to dump 4-5 million tonnes on the world market within 3 months (Bangkok Post , July 1); naturally this will mean lower world prices and higher losses ... 

Another part of the export strategy will be upgrading the exports of parboiled rice (Bangkok Post, July 7) a strategy through which Thailand will once again become the globe's leading exporter of rice. This would be the dumping part of the government scheme. Export markets for parboiled rice are mostly cash-strapped African nations. 

New ideas for rice pledging? Lower the price but maintain higher prices for farmers with smaller acreages. So reports the Nation (July 9). This might be cheaper in terms of subsidy, but higher costs for administration and higher rates of corruption .... Typical political thinking ...

Other ideas? Thanks to the Nation (July 4) we also note that:

'Countries such as Vietnam, India, Cambodia and Myanmar would also be encouraged to focus on sustainable rice selling in order to provide their farmers a steady income, he [Deputy Commerce Minister Yanyong Phuangrach] added'. 

Sustainable? Isn't that why the rice pledge programme is in trouble? Because it's not sustainable? Not well-thought out?

Or should we see the scheme in a different light? The Bangkok Post suddenly champions the rice pledge scheme (July 2): every country subsidizes their farmers, so why not Thai?

Corruption? Yeah corruption is everywhere in Thailand.

'Our farmers need our help. I think most people will agree with that. Let's have an honest discussion that puts things in perspective and come up with policies that can help make the lives of our farmers more bearable, so once again we can put a smile back on all those grumpy faces'.

Another option? The Nation (July 12) quotes UN's FAO organisation as noting that Thailand could become the no. 1 seller of rice exports once again (yeah?). That's if they lower their pledging price ... Think again.

The outlay for the rice-pledging scheme will increase; apparently there is a need for more storage capacity (Nation, July 16).

Deeper thought

Bangkok Post (July 23) cooked up opinion: rice plan was always a recipe for disaster?

'The biggest problem, however, is that even now, after so many bad turns, the government does not seem to realise that it has to be more proactive and make some major corrections to its rice-pledging scheme will not stumble into the same pitfalls as it has in the past few years. Having the prime minister eat freshly-cooked rice and proclaim that it is fragrant and delicious won't help'.

Not all is lost (financially?), according to Thai deputy commerce minister (Bangkok Post, July 19), it's a probability:

'The government is prepared to take a big loss as it struggles to offload record stockpiles of rice built up through the state-buying programme, with plans to call for bids on the ageing hoard of grain every two weeks.
"The sale will probably be at a loss as the government aims to increase domestic prices, not to make profits out of the program," Deputy Commerce Minister Yanyong Phuangrach told reporters'.

Bloomberg (July 19) suggest that yes, a loss may occur.

Overtime for Thai finance minister: rating's agency Moody's need not worry (Nation, July 17) he assures us. Thai government confidence (the Nation, July 13):

'The government is confident that the rice-pledging scheme will not negatively affect the country's fiscal position, and is continuing the programme as it helps to increase purchasing power and narrow the income gap, the finance minister said yesterday'.

The Nation (July 15) notes that despite what we might think farmers hardly gain from higher prices:

'Phuti Srisamutnak, president of the Thai Farmers Support Association, said farmers remained poor, despite the high pledging price. Humidity was the main factor that pressured the price, allowing farmers to earn much less than Bt15,000 per tonne. Usually, they get only Bt12,000 a tonne from millers, claiming the rice is of low quality.
"The cost of production has increased considerably in line with the high pledging price. After the government set the price at Bt15,000, the cost of production [including rentals, pesticide, fertiliser, labour, transport, tractor rentals, and fuel) also went up by Bt3,000 a tonne. The cost of production has been increased from Bt5,000 per tonne per rai to more than Bt8,000," he said'.

The Thai troubles with rice pledging even make Time World (July 12) An excerpt of the past 2 years of rice-pledging:

'In the meantime, her administration [Thai PM] has to bat away daily reports on the rice “scheme,” as the local papers call it. Stories hint at galloping costs and widespread corruption. The government has acknowledged the program has already cost [US] $4.4 billion in its first year. How much it will eventually cost depends on a factor outside of the government’s control, the global price of rice'. 

Side issues of rice pledge

• Quality control. 

With the Thai government unable to off-load rice as they await for the moment the market will cave in and the subsequent price rise (hint: they are in for a long wait) there are issues with what is now being sold: is it poor quality produce? Are there traces of fumigation?

Bangkok Post (July 1) reports on a small amount of chemical contamination.

Then come the rumours. To achieve a (to the eye) sell-able product, fumigation is required. Bangkok Post (July 11):

'Mr Suttipong [TV host] argued that he posted about the alleged contamination of some rice brands [amongst them CP brand Umbrella] with good intentions, because he is concerned about the health of consumers.

While he was composing the post on his iPhone, he accidentally hit the send button, despite the post being incomplete. He immediately deleted the post but it had already been shared by many people, he said.

He insisted that his comments had nothing to do with politics or the intention to discredit any brand of rice'.

TV host is now being sued for defamation.

The government also notes that the (CP) Umbrella brand of rice is safe for consumption (Bangkok Post, July 14).

Bangkok Post (July 16) sides with CP.  

The Nation (July 17) has some quality news:

'A consumer watchdog is calling on the government to inspect packaged rice after random tests found several samples to be tainted with high levels of methyl bromide, which is used to kill rice-eating bugs.
Meanwhile, three state agencies - the Agriculture Department, the Medical Sciences Department and the Food and Drug Administration (FDA) - said they found no contamination in tests they conducted earlier.
Saree Ongsomwang, secretary-general for the Foundation for Consumers, said her agency had teamed up with the Bio Thai Foundation to collect 46 random samples of packaged rice sold under 36 brands to test for chemical substances, including methyl bromide, organophosphate, carbamate compounds and fungicide.
All samples, collected between June 19 and 27 from supermarkets, retail shops and department stores, were tested at an independent laboratory.
Tests found that 12 of the 46 samples were free of contamination, but traces of methyl bromide were found in 34 samples, of which one sample was found to have exceeded the safe level with 67.4 milligram per kilogram of the chemical. As per the United Nations' Food and Agriculture Organisation (FAO) codex, levels of methyl bromide in food should not exceed 50mg per kg'.

The Bangkok Post (July 18), while commenting on TV host affair, hacks in on Facebook:

'And another concern on Facebook is clicking "Like" on your friends' messages and pictures. Before you click "Like", please consider if you should'.

And the Nation (July 18) now comes with the surprising info that state agencies concerned with food health issues are increasing their checks and becoming more strict. Too late?

Bangkok Post (July 20) notes that the Thai PM assures the rice the Thai buy in their local store is up to standard (with the 1 exception).

And it is time to shut up (concerning rice contamination) or else we will shoot ourselves in the foot (Nation, July 21).

Bangkok Post (July 26) notes that even after fumigation, rice is safe to consume.

Bangkok Post (July 24) pays a visit to a rice warehouse: sorry sight. And the expectations are that the government is useless in ensuring proper storage.

Thai Rice Packers are offering compensation if anyone dies after consuming contaminated rice (Nation, July 25).

•  Corruption

And the fire-brand sales of rice (see above) will of course happen transparently (Nation, July 1). 

Despite this assurance,  Anti-Corruption Thailand wants this to happen transparently (?) (Bangkok Post, July 5).

Concerning corruption, one part of the government is claiming that the pledge programme is rife with corruption (Bangkok Post, July 3). Then a day later (Bangkok Post) the PM wants proof (she doesn't believe her own government member?) despite this:

'However, she [the PM] admitted checks on rice stocks at 2,000 warehouses have found evidence of corruption at 27 of them'. 

The Nation (July 6) continues in the same frame:

'... each phase of the rice-pledging scheme process is susceptible to fraud, such as the inflated number of registered farmers, 3 million tonnes of incorrect rice stocks reported and the loss figure of Bt220 billion'.

Then the Bangkok Post (July 7) notices that the government official is actually an undercover agent for the opposition ... Or not? Note the 70 plus comments ...

• Illegal pledging. 

Twenty five tonnes of illegally imported rice from Myanmar are found (Bangkok Post, July 2). 

In Burma they are well aware of the rising amounts disappearing to Thailand (Asia Sentinel, July 9), but note that the illegal trade with China is much higher (est. 800,000 tonnes).

Reuters (July 14) also notes the rice smuggling trade which goes to Thailand whereas everybody would expect the reverse ...

'The International Grains Council in London estimated the equivalent of 750,000 tonnes of milled rice a year was coming into Thailand, senior economist Darren Cooper said. That would be about 900,000 tonnes of unmilled rice, or paddy.
"Clearly shipments (to Thailand) started going up since the intervention scheme started," Cooper said. "It is highly attractive for the neighboring countries to try and get as much rice across to Thailand as possible and supply into the scheme."'

• Theft

Bangkok Post (July 8) mentions that four millers will be charged with theft (actually embezzlement) of rice. No news on whether this has actually happened ...

Regional

Vietnam is much more tentative in it's government involvement in the market (Nation, July 3):

'On June 15, several businesses began to purchase rice for storage in the Mekong Delta under a government programme that aims to ensure farmers' income level.

The government has covered 100 per cent of interest rates on three-month loans to assist businesses to buy rice.

However, the large remaining stockpile of winter-spring rice, due to low exports over the last few months, is a challenge, as the eligible enterprises do not have enough warehouse space to store the forthcoming summer-autumn rice'.

Indonesia has been building up it's own stacks of rice, naturally to make it less susceptible to price swings. This is bad news for exporters ... (Reuters, July 25).

 

Cambodian affairs

An interview with a rice miller in the Phnom Penh Post (July 26). Same, same. Lack of capital to trade, some distrust in providence of product.

Four months after signing an agreement to sell rice to the Philippines, nothing has happened (PPP, July 25):

'Philippine Ambassador to Cambodia Noe Wong and Cambodian Minister of Commerce Cham Prasidh signed a deal in April for the Philippines National Food Authority to import rice through the Cambodian state-owned enterprise Green Trade.

Thon Virak, Green Trade’s director, said yesterday that the company is waiting to schedule a meeting because relevant partners are busy preparing for the election.

“We are still waiting for the delegation from the Philippines to come here for a detailed discussion,” Virak said. “We plan to send the invitation letter to them, but need to wait for Cambodia’s new government to form after the national election.”

Last year, a similar agreement between Cambodia and the Philippines was also planned but could not be finalised after Cambodia reportedly delayed a decision to lower prices to levels the Philippines was demanding'.

Same, same thus.

Though Cambodia's exports are on the up, they are increasingly worrying about the other Thai neighbour, Burma (PPP, July 10):

'Cambodia exported nearly 176,000 tonnes of rice in the first six months of the year, a 125 per cent increase from the same period in 2012, when about 78,000 tonnes left the country.

Most of that, or about 60 per cent, went to countries in the European Union, which grants Cambodia duty-free tariffs under its Everything But Arms agreement to provide opportunities for growth.

In June, however, the EU readmitted Myanmar to its trade preference scheme in response to wide-ranging political and economic reforms taking hold in the country since President Thein Sein took power in 2011'.

What seems odd is the following:

'Srey Chanthy, Acting Interim President of the Cambodian Economic Association, said that Myanmar, with its “large land cultivated area” and “plenty of rice surplus”, can be a big player. But the decades out of the game have taken their toll.

“It will take Myanmar years to be recognised in the market and improve their production standards,” he said.

Chanthy said that Myanmar will have to put in place a new institutional structure and a relevant legal framework with quality standards before it can meet market needs'.

The same could be said for Cambodia ...

Another export market, Brunei is to be focussed on (PPP, July 7):

'With its first shipment expected in November, the Baitong Rice Export Company and the Federation of Cambodian Rice Millers Association will send 3,000 tonnes of fragrant rice to Brunei, the smallest of the 10-member ASEAN states, with a population of a little more than 400,000'. 

Note the prices of over $1000 a tonne!

Not only are overall Cambodian rice exports up (doubled!), exports of organic rice are also double (Cambodia Daily, July 10):

'“In the first six months of this year we’ve exported about 200 tons of organic rice, which is about double last year’s figure,” said Cedac president Yang Saing Koma, adding that farmers aren’t producing enough to meet de­mand. “We hope that by next year, we’ll be exporting 1,500 tons annually.”' 

Hong Kong officials wants more direct Cambodian rice imports (PPP, July 2).

A little hybrid

Malaya Business Insight (July 9) has some new insights on hybrid seeds:

'Market forces and realities on the ground should allow farmers to choose hybrid rice or not.

“There should be no subsidy for hybrid rice,” said Susan R. Brena who heads the Seed Technology Division of the Philippine Rice Research Institute (PhilRice). 

“If you want agriculture to take off, let’s teach our farmers to pay for premium quality seeds,” she told Malaya Business Insight.

...

The plan is to increase the hectarage of hybrids by 72 percent to 284,400 hectares; last year it was 164,787 hectares – or just 3.5 percent of the country’s of 4,689,960 hectares. The hybrid rice hectarage will be expanded to 388,000 hectares next year'.

So despite private investment and goverment investment, hybrids still fail to take off on a larger scale?