ANALYSIS OF RICE EXPORT COMPETITIVENESS IN CAMBODIA

Abstract

This study uses SWOT matrix analysis and Porter’s diamond model to examine current challenges of rice export and its history in Cambodia. We find that Cambodian rice is strong in agricultural land and labor, premium rice quality, and duty-free from European Union. However, the country still faces some constraints from supporting industries such as high cost of logistics, poor infrastructure, poor milling technology, limited access to financial support, high transportation and electricity cost, high imported price of fertilizer, pesticide, and agricultural machinery. Rice competitiveness is also accessed. The market share analysis, and revealed comparative and competitive advantage are used for analysis tool. The result shows that Thailand and Vietnam are still the dominant rice exporter as occupying 40% of world rice market share. Meanwhile, for rice competitiveness, Vietnam is the top one as following by Myanmar and Cambodia. As formula are depending on a country’s share of total trade in the world market, if one country has a relatively large share of total trade than its total rice trade; so revealed comparative advantage will be relatively smaller. Rice export demand and supply are also estimated using Autoregressive Distributed Lag (ARDL) for Cambodian rice export over the period of 15 years (1997-2011). In the long run, world rice export price, rice export quantity in other countries, and two-lagged last period of rice export demand are significantly positive to export demand. While, export price and last period of rice export quantity in other countries are significantly negative to export demand. In short run, rice export price is significantly negative. And, rice export quantity in other countries is significantly positive. Speed of adjustment implies that 98% of the disequilibrium of the previous year’s shocks would adjust back to the long run equilibrium in the current year. Whereas, in the long run, domestic rice production is significantly positive to rice export supply. In short run, domestic rice product is significantly positive to rice export supply. Speed of adjustment is 98%.