The Thai government's decision to lower the guaranteed price of rice to Thai farmers will not affect Cambodian rice exports, according to Sok David, vice president of Golden Rice Cambodia in Phnom Penh.
A Cambodian farmer works on a rice field in Phnom Penh. Cambodia banks on cheaper prices in exporting rice to other countries. (EPA file photo)
Sok David, vice president of Golden Rice Cambodia, an exporting firm based in Phnom Penh, said Cambodia was more competitive because of its lower prices, especially compared to Thai fragrant rice, the Phnom Penh Post reported on Friday.
The price of Thai fragrant white rice was quoted on Wednesday at US$1,160 per tonne, according to the Thai Rice Exporters Association. Rice exporters in Cambodia said it was $100-150 cheaper.
Exports of milled rice from Cambodia more than doubled in the first five months of this year.
Cambodia exported 146,854 tonnes of milled rice from January to May, a 127% increase year-on-year, according to the Council of the Development of Cambodia. France was the chief buyer of Cambodian rice in the first five months of this year, followed by Poland, Thailand, Malaysia and China.
The Thai government will reduce the pledged price of ordinary rice from farmers to 12,000 baht from 15,000 baht from June 30. It has set a 500,000 baht ceiling for payments of each household, a change from unlimited purchases since the ruling Pheu Thai Party introduced the controversial policy.
The Thai Exporters Association said on Thursday that rice exports from Thailand will increase, thanks to the government's reduction of the pledging price to farmers.
But it angered farmers who threatened a rally in Bangkok if the government does not reverse it, at least until the end of the present crop term on Sept 15.
Farmers leaders from 22 provinces will submit a letter to Prime Minister Yingluck Shinawatra demanding she accept the change at Government House next Tuesday.
Prathum Saengkham, a farmer leader in Bang Rakam district of Phitsanulok province, on Friday blasted the government as ''a liar'' for reneging on its policy promised to farmers during the election campaign.
"We are ready to negotiate with the government. We do not want to hold a rally because it will cause trouble for other people,'' he said.
Pheu Thai has ordered its MPs to quickly return to their constituencies to explain to farmers the need for the government to reduce the purchasing price and set a maximum payment for each household to limit the damage,
The change came after the government finally admitted under pressure that the scheme suffered a loss of 136 billion baht in the first year, the 2011-12 crop year.
Supachai Panitchpakdi, the secretary-general of the UN Conference on Trade and Development, said Thailand's rice policies should not cause the country to lose its market share in the global market.
"We need to be concerned about our policies relating to international trade. We have many competitors and we cannot afford to lose our market share further, because this will result in a significant amount of money lost from exports," he said.
He said people were willing to purchase expensive rice if it was of good quality, but amidst the economic downturn consumers would turn to cheaper rice.
Thailand needs to increase its competitiveness in terms of the quality of agricultural products, he said.
"African countries, for instance, like Thai rice very much, but the current price is just too high," said Mr Supachai.