To get the latest news on Cambodia's business and tech, join Kiripost on Telegram.

Cambodian paddy prices have historically increased, directly benefiting farmers socioeconomically while indicating a negative trend for rice millers, stated Chan Sokheang, President of Cambodia Rice Federation (CRF).

When asked why Cambodian rice millers are unable to source paddy at competitive prices and sell rice to international markets like Vietnam, Sokheang told Kiripost that Cambodia's rice industry has fewer factories for reprocessing rice by-products compared to Vietnam.

Vietnam has a greater capacity to engage in the rice market and possesses high manufacturing capabilities in the agri-food processing industry, enabling the country to take advantage of this situation.

"This means that Vietnam's extensive agri-food processing sector, capable of converting rice by-products, such as husks and bran, into other semi-final or final products like biomass and oil, generates additional revenue. Their convenient and affordable waterway transportation places Vietnam in a highly competitive position against Cambodia," he said.

Sokheang noted that Cambodia's rice price, in comparison to paddy prices, has not yet been accepted by international buyers. This has caused most rice millers to refrain from purchasing paddy from farmers, as there have been no offers from buyers to absorb the new price.

"The rising paddy price, leading to a significant increase in rice prices, negatively affects the international rice market, especially in China and Europe. Unlike Cambodia, Vietnam and Thailand, who can absorb the increasing paddy prices," he explained.

Global Food Security Is at Crossroads as Rice Shortages and Surging Prices Hit the Most Vulnerable

Sokheang said that CRF is collaborating with the new government of Prime Minister Hun Manet to address various challenges to develop the rice sector's potential to meet the standards required to become a major rice exporter. These issues include high production costs, inadequate infrastructure, and competition from other countries.

Despite existing limitations in competitiveness, Cambodia holds the potential to export rice internationally due to its ability to consistently produce 5 to 6 million tons of paddy per year, exceeding domestic consumption. Cambodia's rice exports will play a crucial role in ensuring food security in the Asian region and around the world.

In comparison to other Asian nations, Cambodia's rice milling facilities are claimed to have improved significantly in terms of quality and food safety to meet international standards, according to Sokheang.

Similarly, Yang Saing Koma, an agriculture expert turned Secretary of State at the Ministry of Agriculture, Forestry, and Fisheries (MAFF), provided a pessimistic assessment of the vulnerability of rice millers due to rising paddy prices combined with a global market that rejects these costs, making it challenging to compete with Vietnam.

Saing Koma said that MAFF is making positive steps for the Cambodian rice industry by enhancing the storage capacity of rice millers and introducing modern rice processing equipment to meet the demands of the production value chain.

"Technically, the shortage of Cambodian rice millers stems from a lack of working capital to purchase paddy for storage and rice stockpiling plans to meet local demand," he stated.

He asserted that with sustainable farming practices that enable year-round production, Cambodia can ensure both domestic and global food security.

According to Vietnam Food Association (VFA), Vietnam's 5 percent broken rice reached a new peak of $638 per ton on August 24, while 25 percent broken rice was $623. In comparison, Cambodia's 5 percent broken rice ranged from $680 to $700, which is higher than Vietnam by $30 to $58, stated Sokheang.

The Philippines, China, and Indonesia were Vietnam’s three largest rice buyers. Despite reducing imports from other countries due to high prices, the Philippines continued to increase imports from Vietnam.

Vietnam also imports rice from India, primarily for food processing and animal feed production. However, India's ban on white rice exports is expected to have minimal impact on the Vietnamese market.

Sign up for Kiripost newsletter, for in-depth stories on Cambodia's business and tech