Local rice prices stable against int'l freefall

RICE prices have remained relatively stable in the Kingdom this year, despite a decline in international prices of nearly 20 percent during the first five months of 2010, according to a United Nations report.

Domestic prices for two varieties of rice and paddy rice tracked by the Ministry of Commerce Trade Promotion Department have increased by an average of 3 percent overall from January 1 to the end of May, its statistics show.

Cambodian Economic Association president Chan Sophal said Cambodia’s rice prices often moved independently of the international market.
“It’s a smaller, niche market. Suppliers for the domestic market are usually local, and Cambodia is a net exporter of rice.”

The UN’s Food and Agriculture Organisation (FAO) recorded a 19.9 percent drop in global rice prices in its bi-annual Food Outlook report released late last week, with its rice index falling to 201 points at the end of May, from 251 points at the beginning of the year.

International prices briefly surged in the last two months 2009 when the Philippines extended four large international tenders for 2 million tonnes of rice, but the FAO report suggested prices began declining in January after Philippine demand subsided into the new year.

Domestic prices remained relatively unchanged this year after falling from highs experienced during 2008, Cambodian Centre for Study and Development in Agriculture President Yang Saing Koma said.

“Prices have been relatively stable this year. Many people were expecting prices to increase more than they have,” and national and international rice prices negatively impacted supply-side producers, he said.

“I think for traders and producers it’s not so good, they were expecting a larger profit. But it’s good for consumers, especially poor people who want to buy rice.”

Prices in the Kingdom traditionally begin to rise in July, he added.

Paddy production was tentatively expected to increase 3.6 percent internationally to 707 million tonnes in 2010, according to the FAO. However, the report anticipated Cambodia may face a large decline in production this year.

“The impacts of water scarcity and high temperatures could be even more pronounced in Cambodia, where they are expected to cause a 22 percent retrenchment in output in 2010,” it said.

Yang Saing Koma said it was too early to accurately project this year’s yield, but said early indications were not favourable.

“Production depends on the weather. The start of this year’s rainy season has not been so good, but we have to wait and see.”

(source from Phnompenh post,Monday, 07 June 2010 15:01 Jeremy Mullins)