Rice is the anchor of the Lao farming system, accounting over 90% of total crop production.

Rice milling in the Lao PDR is mainly done at the village level and in small mills with poor equipment and an average capacity of around 6 paddy tonnes per day. While there are no consistent figures, such mills probably account for around 90% of the paddy milled in the country.

According to the Rice Policy Study conducted in 2012 (Lao People’s Democratic Republic Rice Policy Study, 2012), there were probably less than 10 mills in the whole country that could be considered large and have an average processing capacity of around 33 paddy tonnes per day and 200 medium-sized mills whose average capacity was about 16 paddy tonnes per day.

The study adds that, most mills operate at just about 50 percent capacity and with low operating profit margins, but the exceptions are those mills that are able to obtain government contracts with favorable terms and conditions or have access to credit at affordable rates.

In addition to low capacity utilization, mills in the Lao PDR have poor milling rates (with few exceptions), mainly because processing equipment is old and technical capacity is lacking in many cases; milling rates are 58% and lower. More modern mills reach milling rates of 62% and higher. At present, most qualitative information gathered indicates an average milling rate in the Lao PDR of about 60% (Lao People’s Democratic Republic Rice Policy Study, 2012)

Rice millers have a choice of three different ways of operating and often combine two or three:

• Custom milling: Farmers or small traders bring their paddy to the mill. If the miller keeps the bran, there is no charge for milling. This is a common practice. The bran is sold to poultry and pig farmers or to small traders who bring their paddy to the mill. Otherwise, there is a milling fee of around K 1,500/12 kg of rice. Custom milling is usually done by small and medium size mills;
• Commercial milling: The miller buys paddy and sells rice directly to the market retailers of through intermediary traders. Millers have the requisite storage capacity and financial resources may store paddy up to 10 months to take advantage of higher prices in August and September, preceding the new harvest.
• Contract milling: For Government institutes, for the provincial Departments of Commerce, for the SEFCP, and sometimes for international organizations such as WFP.

Source: Diagnostic Study of the Agricultural and Agribusiness Sectors 

Rice millers in the Vientiane area often buy paddy at lower prices from Khammouan and Savannakhet. Village mills and the small District mills tend to be very busy during May and June just after the harvest of dry season paddy and during November and December following the main wet season harvest. Other millers, especially larger capacity mills, store paddy and mill during the rainy season.

4.5 Laos Storage and Milling Company Contact List