the end of cheap rice developments affecting the cambodian rice market – an overview prepared by...
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![Page 1: The End of Cheap Rice Developments affecting the Cambodian rice market – an overview prepared by Winfried Scheewe, DED Marketing Advisor to CEDAC Revised](https://reader030.vdocument.in/reader030/viewer/2022032517/56649c9b5503460f94958dd8/html5/thumbnails/1.jpg)
The End of Cheap Rice
Developments affecting the
Cambodian rice market –
an overview
prepared by Winfried Scheewe, DED Marketing Advisor to CEDAC
Revised 03 May 2008
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•
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What happened?
• Soaring rice prices are hurting especially the poor
• Staple food for more than half the earth's population, causing political unrest
• Prices for wheat and corn also up
• Supply bottlenecks• Sometimes draconian
moves by governments to protect domestic stocks
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Price development in Phnom Penh(02 January to 30 April 2008)
Rice: Whole Sale Prices in Phnom Penh Markets (Prices in US$ per 50 kg bag)
0
10
20
30
40
50
60
07 0
121
01
05 0
2
22 0
203
03
16 0
324
03
02 0
411
04
30 0
4
Date
US
$ p
er
50
kg
ba
g
Phkar Malis
Phkar Khney
Neang Khon
Neang Mihn
Note: On 26 March the Cambodian government issued an export ban for rice.
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Where does the paddy go?Destination of Camodia's Paddy (2007/08
6,700,000 tons (Estimates)
Informal export (64.6%) , 4,330,400
Domestic market (16.2%), 1,082,600
Kept by farmers (19.2%) , 1,287,000
Based on estimates by MAF, CEDAC and World Bank
The informal exports cause loses to the economy and could pose a threat to food security. There is a lack of capital for stocks and storage facilities.
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Consumption of Milled Rice*
* CEDAC estimates
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Rice world market facts• Annual production:
645 million tons of paddy (=430 million tons in milled rice)
• 114 producing countries in 2007
• For 3 billion-plus people rice is the basic staple
• Seven (7) percent of the rice production worldwide is traded internationally (= 30 million tons)(17 percent of the global wheat production is traded internationally.)
• Changes in supply and demand have drastic effects on the rice prices in most countries, affecting the lives of billons.
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Major exporting countries (2007)
If Cambodia’s rice exports would be properly accounted for, it could rank next to China.
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Major importing countries (2007)
Many countries import rice, often relatively small quantities. Currently the Philippines is the biggest importer.
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Consumption exceeds production
World Rice Production and Consumption
-50.0
100.0150.0200.0250.0300.0350.0400.0450.0
Mil
lio
n m
etri
c to
ns
Production
Consumption
Ending Stocks
Worldwide, during several years, consumption exceeded the production. Consequently the available rice (here - year-end stocks) declined.
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Declining stocks
Rice: Ending Stocks (World)-Good for how many days?
020406080
100120140160
1978
/79
1983
/84
1988
/89
1993
/94
1998
/99
2003
/04
2007
/08
Mill
ion
to
ns
/No
. of
Da
ys
Ending stocks
Days
Stocks worldwide are currently on the lowest level since 25 years and are expected to fall below 70 million tons. When stocks were at a low point, the ending stocks were good for only 79 days.
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Bangkok and Phnom Penh prices
Whole Sale Prices in Bangkok and Phnom Penh 02 January - 30 April 2008
0.00
10.00
20.00
30.00
40.00
50.00
60.00
02 01
15 01
30 0113 02
27 0212 03
26 0302 04
11 0430 04
US
$ p
er 5
0 kg
bag
Thai Jasmine B (Bangkok)
Thai White B - Export grade (Bangkok)
Cam. Phkar Malis (PhnomPenh)
Cam Phkar Khney (PhnomPenh)
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Trends of production and prices (Worldwide 1961 - 2004)
Rice export prices are adjusted for inflation and expressed in US dollar (exchange rates of 2004). (Data: USDA, FAO and IMF)
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Other grains
• Prices for rice, wheat and corn are related
• Wheat prices also increased since 2007
• Significant share of the US corn harvest used for biofuel
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Wheat and corn prices likewise increased
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Another green revolution - or sustainable livelihoods?
• IRRI and others proclaim the need for another Green Revolution. raise funds for research
• Companies promote hybrid and GMO seeds
• Ignoring farmers’ innovations such as the Systematic Rice Intensification (SRI) and the MASIPAG rice breeding program
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Enhancing food security
• Support farmers to enhance their skills and capacity to cope with the challenges
• Capital (soft loans) for investments in rice stocks, warehouses and mills
• Farmer’s groups can be enabled to keep and store paddy for several months.
• Farmers’ organizations and networks need to monitor prices, and to
• provide their communities with relevant market information
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Utilizing export markets
• Cambodia produces a considerable surplus of rice
• Production can be increased, esp. fragrant rice• Foster partnerships with rice traders abroad• Challenges: capital, procurement, grain quality• Need to ban GMO rice seeds
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Thank you!