Home > Business, Cambodia Business News > Association warns of $720m rice loan need

Association warns of $720m rice loan need


A Cambodian rice field photographed in 2006.

CAMBODIA’S
Small and Medium Industries Association warned that domestic rice
millers require US$720 million in loans this harvest season, or they
risk being out-competed by foreign merchants.

“We cannot compete
with buyers from Thailand and Vietnam to buy grain if local rice mills
can’t receive more capital from the government or private banks,” said the association’s secretary general Ut Ren.

Cambodia has about 100 millers, which purchase paddy from farmers, process the rice and sell it to dealers.

If the millers are able to borrow short-term funds, they can purchase more paddy and sell more processed rice.

A
typical Cambodian rice mill can process between 2 and 6 tonnes of rice
per hour, said Ut Ren, and generally possess capital of between $50,000
to $70,000 to buy paddy during the harvest season.

Sur Kheang,
president of the Kampong Cham provincial rice millers’ association,
said its 35 members were clamouring for more capital to purchase paddy.
He said his association required an additional $2 million to add to its
present capital of $390,000 to fund its lending to millers this harvest
season.

“A call for extra funding for rice mills is a very good
idea. Many of our rice mills are facing a lack of capital to buy rice,”
he told The Post.

Schemes are underway to increase agricultural loans to millers.

The government has prepared to lend $36 million to the state-run Rural Development Bank
in order to lend to rice millers, with a focus on those firms with
capacity for exports, according to its director general Sun Kunthor.

Some banks are also increasing their loan portfolio in the field.

In Channy, chief executive officer of ACLEDA Bank – the Kingdom’s largest agricultural lender
– said the bank had lent $112 million to develop rice production from
the start of the year to the end of November, a stark increase on its
loans of $78 million made to the sector last year.

“We are not afraid to grant loans for buying
rice, since we see there are now modern rice processing machines in
Cambodia, and also increased orders from overseas,” he said.

The
Kingdom’s updated rice policy aims to ramp up exports of milled
rice.Cambodia’s stated aim is to hit 1 million tonnes in rice exports
by 2015.
Local firms are also looking to export to new markets,
with Golden Rice targeting 50,000 tonnes of rice to Europe, the United
States and Asia in the next year.



By Chun Sophal

Phnom Penh Post
Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: