Thailand import ban on rice slows trade with Cambodia

Phnom Penh Post
May Kunmakara
Wednesday, 25 January 2012

Cambodia's total exports to Thailand decreased by more than 20 per cent year-on-year through November, the effect of a Thai ban on paddy imports from the Kingdom, officials said.

Exports to Cambodia’s western neighbour fell to US$159 million in the first 11 months of 2011, down from about $200 million during the same period the year before, data from the Royal Thai Embassy in Phnom Penh showed.

Bilateral trade, however, increased by 10 per cent, hitting $2.59 billion in 2011 through November.

Thailand temporarily banned Cambodian paddy imports last year when the Kingdom’s rice prices fell below that of Thailand’s, Thai Embassy Trade Promotion Officer Jiranan Wongmongkol said this week.

The ban has since been lifted but did contribute to Cambodia’s falling export figures, Jiranan Wongmongkol confirmed. A Thai ban on Cambodian corn also stymied the exports, she added.

Changing trade patterns may have lowered agricultural shipments to Thailand, Jiranan Wongmongkol said. Whereas Thailand often processed and resold Cambodian cassava products, China and Vietnam have recently started buying processed and raw cassava directly from Cambodia, she said.

A Thai ban on Cambodian paddy would not halt unofficial exports to Thailand, University of Cambodia economics and business lecturer Chheng Kimlong said.

“Even with a ban, it doesn’t mean that we did not export paddy to Thailand. We did but we did it unofficial. [The trade] wasn’t recorded,” he said.

Exports to Thailand – official or unofficial – are the only option for many Cambodian rice farmers. Chheng Kimlong said domestic mills don’t have the capacity to purchase much of the Kingdom’s paddy harvest.

Cambodia’s exports to Thailand, which comprise only a fraction of bilateral trade figures, are mainly agricultural products such as rice, corn and beans. Thailand exports oil, cement, construction materials, as well as a wealth of consumer products to Cambodia.

Floods and political problems have turned Cambodia into an attractive investment destination for Thai companies, Thai Business Council of Cambodia deputy manager Kriegn Kria said.

“[Investors] mostly want to invest in processing factories like rice milling and garment in Koh Kong and Banteay Meanchey provinces,” he said.

“This year we will see more big factories moving from Thailand to Cambodia because Thailand has big problem. Politics and natural disasters like flood have impacted their businesses.”