Speed up Rice Loan, China Told

KHMER TIMES
CHEA VANNAK

Rice farmers threshing their just harvested crop to loosen the paddy grains. The government has requested China to speed up the disbursement of a $300 million loan to help the rice sector survive. KT/Chor Sokunthea

The government has asked China to make good on its pledge to buy 200,000 tons of rice annually from the Kingdom and also to speed up the approval of a $300 million loan to the country’s beleaguered rice sector.

This request was made yesterday during a meeting between Deputy Prime Minister Hor Namhong and the newly-appointed Chinese Ambassador to Cambodia Xiong Bo.

Speaking to reporters after the meeting, Mr. Namhong said China heeded Cambodia’s call to help the country’s rice farmers and millers who are grappling with falling prices and struggling to compete with the influx of cheaper rice from neighboring countries.

“China has been buying 100,000 tons of rice a year from Cambodia. Recently China agreed to buy an additional 100,000 tons annually, raising their quota to 200,000 tons a year. I asked the newly-appointed Chinese ambassador to help accelerate this,” added Mr. Namhong.
“This purchase of 200,000 tons of milled rice annually is very important to help Cambodian farmers.”

Chinese Premer Li Keqiang, in his meeting with Cambodian Prime Minister Hun Sen in Laos early this month, pledged to double China’s annual purchase of 100,000 tons of Cambodian rice to 200,000 tons, starting from next year.

Mr. Namhong also called on China to disburse its pledged loan of $300 million to Cambodia’s rice millers for building warehouses with drying facilities.

In a bid to stabilize falling prices, the Cambodian government last week gave the green light to the Rural Development Bank (RDB) to disburse loans totaling $27 million to millers to buy paddy rice from farmers at 840 riel ($0.21) per kilogram.

Phou Poy, president of the Green Rice Miller in Battambang province and also chairman of the Rice Bank, told Khmer Times that the RDB intervention was necessary to prevent rice prices from tumbling further.

“Without the 840 riel per kilogram government price, the price of rice might go into a free fall,” he warned.

But Mr. Poy pointed out that the $27 million was only a short-term measure.

“We have to take into account the capacity of rice millers to store paddy rice in their warehouses and sell milled rice at a time when there is surplus rice in the market. If there is good market demand for their milled rice, and if they have the capacity to store paddy rice in their warehouses, then $20 million to $30 million is enough,” he said.

“But if the market is not there due to the influx of cheap quality rice from neighboring countries, then this $27 million will not go a long way. Then it’s just a band aid measure for the rice millers.”