The cross-border trade in rice from Cambodia to Vietnam

Abstract

The cross-border trade in paddy from Cambodia to Vietnam, especially between Takeo and An Giang Provinces, has increased substantially in volume, reaching an estimated 1000 t per day in the peak season of November-December. The growth of this trade is because (1) the quality of the wet-season crop in Takeo meets domestic demand in Vietnam; (2) some An Giang farmers rent land for cultivation in Cambodia and transport paddy into Vietnam for the domestic market; (3) the harvest in Takeo is later than in An Giang, helping maintain the throughput of the rice mills in An Giang; (4) Cambodian paddy is cheaper than Vietnamese paddy of the same type; (5) Cambodia does not have sufficient capacity for processing and storage. The cross-border value chain has three channels: (1) from producers directly to Vietnamese traders (5%); (2) from producers to Cambodian traders, who sell to Vietnamese traders (55%); and (3) from producers to Cambodian traders who sell to Vietnamese paddy wholesalers along the border (40%). Processed rice is distributed to wholesalers in the cities or directly to numerous traditional retailers. While there is no formal labelling or certification, the Cambodian rice is identifiable to consumers who pay 50-100% more for traditional Cambodian rice. The volume of paddy from Cambodia increases the supply of specialty rice for the domestic market in Vietnam, thus filling an important niche. Imports from Cambodia also frees up domestic rice for the export market. However, these cheaper paddy imports may also have a negative impact on domestic production and incomes, especially in the border areas. It may be necessary to develop joint policies to manage better the cross-border trade.