$2m rice deal agreed with Vietnam

Thursday, 06 August 2009
by Chun Sophal
Posted at: Phnom Penh Post

THE provincial Rice Millers Association (RMA) in Svay Rieng announced Wednesday it will sell a total of 3,000 tonnes of high-quality rice to a Vietnamese company in a US$2 million deal.

Tauch Tepich, the president of the RMA's branch in Svay Rieng province, which borders Vietnam, told the Post the deal should help cut cross-border rice smuggling.

He said the RMA has secured half of the funding needed for the deal with the Saigon Trading Group (SATRA). Tauch Tepich said his RMA will provide $500,000, and that the same amount will be loaned by the Rural Development Bank.

"The process increases job opportunities for Cambodians and boosts the local economy."

"Our plan to export rice to Vietnam will be successful if we are supported with a loan by the government [for the remaining $1 million]," he said.

Svay Rieng's RMA will buy the phka rumduol rice once the harvest starts in October, and will supply it between October and early 2010 to the Ho Chi Minh City-based buyer at around $650 a tonne.

Son Koun Thor, chairman and chief executive officer of the government-controlled Rural Development Bank, said the bank will this year lend $18 million to RMAs to buy and store unmilled rice.He said Svay Rieng is ideally positioned to benefit from exporting to Vietnam, which is why the bank has increased its loan from $320,000 last year to $500,000 this year. It charges monthly interest at 0.5 percent.

"We are increasing the loan because we want to encourage the export of milled rice rather than paddy rice, because the process increases job opportunities for Cambodians and boosts the local economy," he said.

Cross-border smuggling of rice has long been a problem. Earlier this year Vietnam reported that 1 million tonnes of unmilled rice were smuggled into Vietnam in 2008.