A Cambodian farmer pushes his bicycle loaded with rice from the paddy field during the harvest season in Takeo province on November 29, 2008. TANG CHHIN SOTHY/AFP
The Kingdom’s rice exports saw little change during the last three years to 2018 as the sector appears to face new challenges requiring the government and private sector to work harder to keep the industry healthy.
The challenges are centred around the EU market as the bloc imposes tariffs on Cambodia’s rice, added on to existing issues such as higher production costs and a lack of infrastructure.
However, industry insiders said the volume of this year’s rice exports will remain steady due to a new quota from China and Vietnam.
Ministry of Agriculture, Forestry and Fisheries figures show that the Kingdom exported 626,225 tonnes of rice last year, decreasing 1.5 per cent from 635,679 tonnes in 2017.
The figures show that the main destinations were the EU with a total of 269,127 tonnes and China with 170,154 tonnes.
Cambodia exported 542,144 tonnes of rice in 2016, a 0.7 per cent increase from 2015. The nominal increase followed a growth spurt in 2015 that saw exports climb by 39 per cent from 387,000 tonnes in 2014.
Amru Rice (Cambodia) Co Ltd chairman and CEO Song Saran on Tuesday said the Kingdom’s export volumes were not higher due to focusing on premium rice – or fragrant rice – for the last three to four years.
Referring to the additional 100,000-tonne quota provided by China, Saran said Cambodia’s rice exports would not be hurt.
“The Kingdom’s rice exports this year could maintain a similar yield as last year because China agreed to buy more rice from us. That would push Cambodian’s premium rice market,” he said adding that the Kingdom exports almost 90 per cent of its premium rice to the international market.
Premium competition
Cambodian premium rice is sold from $950 to $960 per tonne while normal rice – or indica rice – is sold at about $420 per tonne, Saran said. However, he said Cambodia still faces challenges due to competition.
“We still need more time to promote our rice products to the international arena,” he said, adding that Cambodia’s agricultural sector is still young compared to leading countries.
Centre for Policy Studies director Chan Sophal said that while the country has missed its target export of one million tonnes since 2015, its rice exports stand at around 600,000 tonnes. He said the higher production costs and the lack of the sector’s infrastructure are limiting competition.
“For this year’s exports, [I] predict that they may not increase because tax needs to be paid to export Cambodia’s fragrant rice to the EU market,” he said.
Sophal said that while the government is trying to boost the sector by cutting production costs to improve its competitiveness, it needs to improve infrastructure – roads and irrigation systems.
Faced with the EU’s decision to impose import tariffs, Cambodia’s rice could face a much more serious issue if the EU’s preferential Everything But Arms agreement is withdrawn.
Sophal said it is preferable if the Kingdom diversifies its export destinations, rather than rely on any one market.
After the EU imposed tariffs on rice imported from Cambodia, China agreed in January to increase its import quota for Cambodian rice to 400,000 tonnes this year from the previous 300,000 tonnes.
The move was followed by Vietnam, which agreed this month to expand its import quota for the Kingdom’s rice to 300,000 tonnes.
Hun Lak, vice-president of the Cambodia Rice Federation and chairman of Mekong Oryza Trading Co Ltd, said the Kingdom currently has a G2G (government to government) agreement with only China and Vietnam, which allows duty-free rice exports.
He expressed his hope that Cambodia’s rice exports this year could yield a similar amount to last year, with Cambodia receiving a higher quota from China.
“By exporting to China, we could reach the target. The government is currently putting in place supporting measures to reduce production costs,” he said.
Ministry of Commerce spokesman Seang Thay said the ministry is always looking for new markets for the Kingdom’s products.
He said despite the Kingdom having quota agreements with only two countries, it is also working bilaterally with many others.
“Cambodia has good diplomatic relations. It currently exports to many destinations around the world,” he said.
