Cambodian milled-rice exports remain fraught with major hurdles, requiring industry players to adopt a clear strategy in response that builds a competitive edge and ensures sustainability in the sector, specifically as a bulwark against the persistent pressure from the Covid-19 pandemic.
Cambodia Rice Federation (CRF) president Song Saran made the remark at a virtual extraordinary meeting of the CRF on July 13 held under the theme “Economic adaptation of Cambodian milled rice exports in the context of Covid-19”.
Some of the more pressing challenges are rising ocean freight costs, a shortage of shipping containers, significant drops in the price of jasmine rice on the international market, rising input prices, and millers’ lack of capital to buy paddy for stockpiling.
Saran told The Post on July 15 that the global spread of Covid-19 was hampering Cambodia’s milled rice export capacity, prompting CRF members to develop careful, highly-efficient and comprehensive approaches to ongoing and potential headaches.
“With all these challenges at hand, the federation will continue to discuss with the government to find a solution for the exporter members that face them,” he said.
He said the burdens posed by the influence of Covid-19 have also been undermining plans set by the CRF last year to export 800,000 tonnes of milled rice in 2021.
“We do not expect milled rice exports to increase as expected in 2021 because [concerns over] shipments [such as soaring charter rates and container shortages] have not eased,” Saran said.
CRF chairman Hun Lak emphasised that all stakeholders of the Cambodian rice industry must get involved in making recommendations to the federation and brainstorming suitable solutions for the sector, especially for the upcoming harvest season and in the longer-term.
At the same time, exporters need to strengthen and improve competitiveness abroad and deepen integration into regional and global value chains to capture a greater share in major international markets, to provide competitive advantages to the Kingdom’s rice sector and ensure sustainability, he said.
In the first half of 2021, Cambodian milled-rice exports fell by 29.47 per cent year-on-year in volume, but were similar to levels seen in the same periods of 2017-2019, the CRF reported.
The Kingdom shipped a total of 280,450 tonnes of milled rice to 49 international markets over the January-June period, valued at $202.67 million, down by 23.71 per cent year-on-year.
The CRF ascribed the decline to the skyrocketing shipping rates and container shortages that plague Cambodian shipments to the EU, as well as a nosedive in the price of Cambodia’s Grade-A fragrant milled rice, which has fallen to $730 from an average of $900 a tonne.
Saran told The Post on July 7 that the government and the CRF had been looking to increase exports to Asian destinations, such as Hong Kong and Macau, to offset declines to the EU caused by a host of issues.
“The CRF will hold meetings with its members to devise strategies to compile into an upcoming plan – concerning paddy stocks and maintaining prices steady during the next harvest, as well as assisting members with working capital to buy paddy – to propose to the Royal Government of Cambodia for the sake of the entire Cambodian rice sector,” he said.
Ministry of Commerce spokesman Seang Thay said the government is speeding up negotiations with the Chinese side to increase the import quota for Cambodian milled rice from 400,000 tonnes to 500,000.
China increased its quota by 100,000 tonnes annually from 100,000 in 2016 to 400,000 in 2019 for jasmine, fragrant, white and broken varieties of Cambodian milled rice.
Cambodia exported 690,829 tonnes of milled rice last year, marking an increase of 11.40 per cent from 2019, according to CRF data.
China topped the list of importers, purchasing 289,439 tonnes or 41.90 per cent of the grain, followed by the EU at 203,791 tonnes or 29.50 per cent.