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Gov’t asks Korea firms for additional investment in fruit processing sector

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A fair share of agricultural exports to China, especially bananas, have gotten stuck at congested ports in the first few months of this year, industry players have reported. Heng Chivoan

Gov’t asks Korea firms for additional investment in fruit processing sector

The Ministry of Commerce has called on Korean companies to invest in Cambodian fruit processing plants – namely for mango, banana and longan – in order to produce products that meet strict country-specific import standards.

In a meeting with the Korean Importers Association (KOIMA) on May 3, Minister of Commerce Pan Sorasak urged companies from the East Asian country to encourage Korean investors to set up agricultural processing plants in Cambodia that meet the stringent export standards of the country and elsewhere.

“The Ministry of Commerce is ready to support and facilitate business investment in Cambodia, especially by Korean investors, and will aid their cooperation with relevant ministries and institutions to complete the legal process,” he said.

KOIMA vice-president Jang Gyu-hwa noted that the association’s nearly 15,000 member companies have been investing in multiple sectors in both Cambodia and South Korea.

He said there was particularly strong demand in Korea for Cambodian mango products, “so we aim to import at least 10,000 tonnes of mangoes from Cambodia per year to meet the needs of the Korean market”.

Hun Lak, CEO of Rich Farm Asia Ltd, which grows and exports bananas and mangoes to foreign markets, said that Korean investment would be a good way to diversify the Cambodian agriculture sector, because it “cannot rely only on the Chinese market”.

He revealed that a KOIMA delegation had visited his banana plantation and planned to visit a mango plantation to observe cultivation as well.

“The more markets there are, the better, because in case of market volatility, we can have other channels.

“In the first few months of this year, the spread of Covid-19 presented a huge obstacle – especially to one of the countries we have to export to, China, seeing as it was still in complete lockdown. The export of some Cambodian agricultural products, especially bananas and mangoes, became congested as a result.

“The Chinese market is still locked down, and there is reduced demand, which has caused the price of mangoes to fall sharply. Most exporters have decided to suspend exports,” he said.

Van Rithy, executive director of the Agricultural Export Department of agri-machinery company Angkor Green, said a market expansion would be good news for agricultural exporters and farmers. But he noted that the Korean market in particular presented several challenges for Cambodian exporters.

He highlighted the strict requirements for packaging and sterilisation of food imports to the country, and noted that there was only a handful of Cambodian mango plantations currently licensed to export to South Korea.

“Despite [Cambodia’s] free trade agreement with Korea, technical barriers and hygiene requirements are still significant obstacles, while transportation is still expensive and not yet smooth,” he said.

Rithy said that Angkor Green had never exported mangoes to the Korean market due to the high costs associated with hot water treatment facilities required to sterilise crops and exterminate pests.

Exports of fresh mangoes and processed products decreased in the first quarter of this year, according to new figures from the General Directorate of Agriculture of the Ministry of Agriculture, Forestry and Fisheries.

From January to March, 81,418 tonnes of fresh mangoes were exported, a fall of more than 20 per cent year-on-years, while dried mango exports totalled 5,136 tonnes, down by 13 per cent. Mango syrup came in at 403 tonnes, a steep 75 per cent fall.

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