September 26, 2016 / 10:22 AM / 3 years ago

Cambodia asks China to speed up $300 million rice loan

PHNOM PENH, Sept 26 (Reuters) - Cambodia asked China on Monday to speed up a $300 million loan to help Cambodia’s rice sector that has been hurt by plummeting prices amid fierce global competition.

Deputy Prime Minister Hor Namhong told China’s ambassador to Cambodia, Xiong Bo, during a meeting on Monday that Cambodia urgently needed the funds which it first asked for last year.

China has drawn Cambodia into a closer military and diplomatic relationship in recent years as part of its efforts to quell regional opposition to its sea territorial claims in Asia, deepening China’s already close ties to Cambodia Prime Minister Hun Sen.

Rice farmers in Cambodia have had a hard time competition with other Southeast Asian rice exporters such as Thailand and Vietnam because of expensive transport and higher electricity prices. The lack of overseas demand has pushed prices lower to around $193 per tonne from around $250 in August.

“The Cambodian people are facing a crisis of rice prices which fell rapidly,” said Namhong, adding that he had also asked China to make good on its pledge to buy 300,000 tonnes of Cambodian rice annually.

“I asked the Chinese ambassador to report this to the Chinese government to hurry up to buy rice as China had promised to help our farmers,” he said.

China’s embassy in Phnom Penh did not immediately respond to a Reuters request for comment.

Kann Kunthy, chief executive of rice miller Battambang Rice Investment Co, said that the falling rice prices were a global trend and that Cambodia faces fierce international competition.

“There have been no orders from abroad so millers couldn’t buy rice from farmers,” he said. “Farmers are seriously affected.”

Cambodia exported 530,000 tonnes of rice last year, well below its target of 1 million tonnes, partly because of drought but also due to a global supply glut.

Reporting by Prak Chan Thul; Editing by Amy Sawitta Lefevre and Christian Schmollinger

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