PHNOM PENH, Sept. 16 (FN) — The Cambodian government-backed Rural Development Bank (RDB) will provide a special loan package to the rice cartel to buy paddy rice from farmers, in a bid to stabilize rice prices after farmers complained about the plummeting rice prices, officials said Friday.
"The special loan package is between 20 and 30 million U.S. dollars and will probably be available from next week," RDB's Deputy Director-General Sam Vongsy said during a meeting with about 100 rice millers and exporters.
He said the loan package will be officially announced next week when Prime Minister Samdech Techo Hun Sen approves it.
"We believe that this mechanism will help prevent rice prices from continuing to decline," he said.
Commerce Minister Pan Sorasak said farmers were struggling to make a profit after unscrupulous rice traders in some areas had lowered the prices of paddy rice.
"I hope that this measure will help stabilize rice prices," he said.
Meanwhile, the minister encouraged rice millers and exporters to buy paddy rice from farmers at a competitive price, saying that many countries had promised to import milled rice from Cambodia.
He said the European countries buy some 300,000 tons of milled rice from Cambodia per year, while China has promised to purchase 200,000 tons in the harvest season 2016-2017.
Besides, Indonesia and Timor Leste could import about 400,000 tons and 200,000 tons of rice from Cambodia respectively if agreements on prices and rice types have been reached, he said.
In an attempt to stop the price of fragrant rice from falling further, the Cambodia Rice Bank said Thursday that it would buy the staple grain directly from farmers at the market price of 840 riel (21 U.S. cents) a kilogram.
The Southeast Asian country is an agrarian country with approximately 80 percent of the population being farmers. Last year, the country produced over 9 million tons of paddy rice, according to figures of the Ministry of Agriculture.