Cambodia’s rice export to North Korea?

By Sun Narin

Following North Korea’s wish for the rice import from Cambodia, the country’s rice experts say that Cambodia’s traders will need good prices from North Korea if they want to import rice from Cambodia.

Mr Yong Saing Koma, the president of Cambodian Center for Student and Development in Agriculture Center (CEDAC) said: “ It is dependent on the market price. If the price is good, Cambodian traders will export rice to North Korea rather than neighboring countries,” adding that Cambodia has more rice surplus to export to other countries not only North Korea, but Cambodia does not know yet how much rice that North Korea wants and how much price they will give.

Recently, the new Thailand’s government Pheu Thai announced policy to allow farmers to mortgage their entire harvest at 15,000 baht a tonne for white rice and 20,000 baht for fragrant or Hom Mali rice, which will concern the rice exports. And, Thai rice exporters are looking for the alternative supplies from Vietnam and Cambodia in case the new government makes the price too dear for export, which could halve volume to only 5 million tones next year for a revenue loss of 60 –70 billion baht, according to the local press in Thailand.

“If Thai exporters cannot buy such expensive rice for export, they may opt for much cheaper rice from Vietnam, Cambodia or Burma, as they must maintain their market bases and customers. With the Asean free-trade agreement, such an alternative would be possible,” said Vice-president Charoen Laothamatas of Thai Rice Exports Association (TREA). Some rice exporters and millers have already established trading firms or representative offices in Cambodia and Vietnam to purchase rice for export to foreign customers.

However, critics say that Cambodia’s government will try to find ways to send the rice to North Korea to fulfill its needs since North Korea is a friend of Cambodia and China, which is against the United States. Cambodia has a long history of strong political relationships with North Korea, dating to former king Norodom Sihanouk’s relationship with former North Korean leader Kim Il Sung.

Mr Son Chhay, the Kingdom’s opposition Sam Rainsy Party’s lawmaker, raised the two reasons that North Korea started forging relations with Cambodia: first North Korea sees the noticeable relations between Cambodia and South Korea, which reflects the concerns of its loneliness and second, the country has been facing the extreme shortage of rice and they want low-price rice from Cambodia with the exchange of something else.

“North Korea has to buy rice following the market price rice and Cambodia, in trading, will need only good price for that.” He added that: “North Korea has nothing to exchange with Cambodia. Cambodia should suppress it [North Korea] not to mistreat the people like in Khmer Rouge regime (1975-1979) in Cambodia.”

North Korea is one of the world’s poorest countries and it rarely produces enough food to feed its 24 million people, often as a result of bad weather affecting harvests. International sanctions over its nuclear weapons programme combined with neighbouring South Korea’s refusal to provide help have led to a substantial decline in food aid from its traditional donors. North Korea is keen to import rice as soon as possible and in return North Korea will help Cambodia develop its mining sector and invest in hydropower dams.

However, Yong Saing Koma said that it is not related to policy because the rice export is the private work and the government’s duty is to issue the policy and facilitate the trading.

Cambodia is the world’s 15th biggest producer of rice and the government has set a target of exporting 1 million tonnes of the grain in 2015. Cambodia is expected to ship about 100, 000 tonnes of milled rice this year, up from 50, 000 tonnes in 2010, according to the Economic Institute of Cambodia (EIC).
Cambodia aims to export agricultural products such as rice, corn and beans in return, he said. Earlier this month, the European Commission agreed to provide 10 million euros (US$14.54 million) in emergency good aid to North Korea after find hundreds of thousands at risk of starvation.


Cambodia-Vietnam railway Benefits Cambodia as well as ASEAN

By Sun Narin

Due to the fruitful economic relation and wanting to expand the business with other countries on the land way, Cambodia’s and Vietnam’s government has recently just agreed on the construction of a 257km railway, which will cost at least US$686 million, which does not include the resettlement compensation to residents who have to leave their homes to make way for the line, according to study from China. This rail will be beneficial for Cambodia as well as countries in ASEAN.

The Asian experts say that railway could bring huge economic benefits to Cambodia, especially in agriculture and mineral exploitation. Normally if we want to go from Bangkok to Ho Chi Minh City crossing the well-maintained Cambodian roads, we can go by bus on the road of some 750 kilometers taking less than 20 hours. But now the return of this train seems near. It will also connect Singapore with China going through the territories of Malaysia, Myanmar, Thailand, Laos, Cambodia, and Vietnam. Therefore, it will provide tremendous economic and tourist benefits to those countries.

According to the project, “It is part of the Singapore-Kunming railroad project, so it will be a key railroad for Cambodia to truck goods to regional and global markets, especially in the framework of ASEAN-China Free Trade Area.” The project is part of the ambitious Trans-Asian Railway Network that would connect the huge continent with Europe.

Vietnamese investment in Cambodia mainly focuses on the exploration of minerals, oil and gas, the construction of hydropower electric plants and power transmission lines, rubber plantations and developing transport infrastructure.

Mr Ly Borin, the director of the Railroad Department in the Ministry of Public Works and Transportation in Cambodia, said that this is the first time that Cambodia will have such as railway with Vietnam, which will be beneficial for the two country’s economy and tourism.

He said: “The main purpose is to link the rail from ASEAN to Europe. We are waiting for the final report from China and the decision from the government.” He said that all the countries in ASEAN are committed to making it happen; however, he said the time of starting construction is not clear. He told: “The rail and the trains will be more modern and faster than our present train.”

Bilateral cooperation between Cambodia and Vietnam has developed in many fields, with two-way trade reaching US$1.8 billion in 2010 and Vietnamese businesses investing about US$2 billion in Cambodia. There are a lot of Vietnamese businesses and people living in Cambodia today. Vietnamese products are sold throughout the markets. In 2009, Vietnam and Cambodia signed deals worth US$6 billion at a conference held in Ho Chi Minh City to promote Vietnamese investment in Cambodia.

The railway in the project of China will start in Kampong Speu Province’s Oudong District, pass by Kratie Province’s Snuol District and end at Viet Nam’s Loc Ninh District in the southern border province of Binh Phuoc. As a result, the people living on the development project will be affected. However, Mr Ly Borin said that Cambodia’s government has not studied the effects of the rail on the people’s living yet, but the government will provide them with fair compensation and replace them to a suitable area.

This rail will increase the tourism sector in Cambodia from other countries since it can replace the flight and it will be cheaper, according to the official from the Ministry of Tourism, adding that it will bring more tourists and businessmen from Vietnam to visit Cambodia and so do Cambodian people.

Cambodia’s Opposition Sam Rainsy Party’s spokesman, Mr Yim Sovann, said that the rail would be important for Cambodia’s people because it will reduce the price of transportation. However, he said that it would affect people’s land, house and business, which the government has to compensate people properly legally.

Under a scheme announced in 2008 to develop an intra-Asian railway, China has offered to contribute $500 million to build the Cambodia-Viet Nam stretch of the railway.

It will probably take about 30 months to complete the project. At present, the Asian Development Bank and the Australian government have provided $141 million in loans to Cambodia’s government to restore rail links, including the 254km southern line from the capital to Sihanoukville, and the 388 km north line from Phnom Penh to the border with Thailand.