Logo of Phnom Penh Post newspaper Phnom Penh Post - Rice warehouses are put back on the table in talks with China

Rice warehouses are put back on the table in talks with China

A worker counts sacks of rice at a grain warehouse in Phnom Penh yesterday. Yesterday the Ministry of Commerce announced that it was considering proposals from China for a multimillion-dollar rice warehousing project.
A worker counts sacks of rice at a grain warehouse in Phnom Penh yesterday. Yesterday the Ministry of Commerce announced that it was considering proposals from China for a multimillion-dollar rice warehousing project. Hong Menea

Rice warehouses are put back on the table in talks with China

The Ministry of Commerce announced last week a $400 million proposal by three Chinese firms to build state-run rice warehousing facilities to increase the Kingdom’s storage capacity.

Lacking such capacity has been a longstanding issue that sector experts say has in part hampered ambitions of reaching the 1-million-tonne rice export target.

Commerce Minister Sun Chanthol met with representatives of Chongqing Foreign Trade and Economic Cooperation, Chongqing Grain Group and Guangdong Foreign Construction to discuss the possibility of building warehouses in Battambang, Pursat and Kampong Thom, according to ministry spokesperson Ken Ratha.

“The three companies have come together and proposed a plan for warehousing,” Ratha said.

Construction on the three facilities is planned for 2016, but Ratha said the firms need to confirm a start date after looking into the logistics of the plan.

The Cambodian government last year had drafted a memorandum of understanding asking the Chinese government for a $300 million loan to build 10 warehouses across the country, capable of storing 1.2 million tonnes of paddy. As of July last year, the two sides were still negotiating the conditions and requirements of the agreement.

The recent visit of the Chinese delegation was linked to the Cambodian government’s proposal last year and was “under the same package”, with negotiations still under way on the working capital of the rice sector, according to Mey Kalyan, project leader and senior adviser to the Supreme National Economic Council.

“[The agreement] is a work in progress,” he said. “There are many players and interests to consider before finalising this.”

According to Kalyan, multiple interests had to be considered before going forward with the plan, given that the building of the warehouse will be a public project, but utilisation will be by the private sector.

“We have to know what we want do and do it correctly,” Kalyan said. “We will resolve it as soon as possible and move forward carefully.”

Given that Battambang, and other neighbouring provinces like Pursat and Banteay Meanchey account for a third of the country’s paddy output, the new warehouses were welcomed by Kann Kunthy, CEO of rice miller Brico.

However, Kunthy said it would be more useful if the warehouse were equipped with drying facilities, which would mean that fresh paddy could be dried and stored for a long period of time.

“The big harvest is in November and December, which means you must have a huge warehouse with first-class drying facility to be used during these two months and then the paddy can be used for milling for the next 10 months.”

While currently millers and exporters have limited storage facilities, which means they are only able to buy a limited amount of fresh paddy and sell it, a warehouse with dried paddy stock would help increase exports across different markets, Kunthy added.

“Milled rice from fresh crop, within three months of harvesting, is for markets like Malaysia, China and certain parts of Europe where Southeast Asian people live,” he said. “They prefer more aromatic and soft rice.”

“The second market is Singapore, Europe and the US, which prefer older paddy because the rice is not as sticky.”

MOST VIEWED

  • Hun Sen: Stop Russia sanctions

    Prime Minister Hun Sen said sanctions against Russia as a result of its military offensive in Ukraine should be stopped as they have produced no tangible results, and predicted that a global food crisis would ensue in 2023 as a consequence. Speaking to an audience at

  • Chinese tourists 2.0 – Coming anytime soon?

    Regional tourism is grappling with the absence of the prolific travellers and big spenders – the Chinese tourists. Cambodia, which has welcomed over two million Chinese tourists before Covid-19, is reeling from the economic loss despite being the first to fully open last November ‘To put

  • PM reflects on shoe throwing: Free speech or act of violence?

    Prime Minister Hun Sen on May 17 questioned whether a man who threw a shoe at him while he was in the US was exercising freedom of expression or if it was an act of hostility. Hun Sen was referring to an incident last week when

  • Siem Reap’s Angkor Botanical Garden opens

    The Angkor Botanical Garden was officially opened on May 19 with free entry for both local and international visitors for the first six weeks. The garden was established on a nearly 15ha plot of land in Siem Reap. “After the first six weeks, Angkor Botanical Garden

  • Pub Street on the cards for Battambang

    The Battambang Provincial Authority has announced that it is considering establishing a Pub Street in the area around the heritage buildings in Battambang town in a bid to attract more tourists. Battambang provincial governor Sok Lou told The Post that the establishment of a Pub

  • Hun Sen: Don’t react to hostility

    Prime Minister Hun Sen urged tolerance and thanked members of the Cambodian diaspora for not reacting to the hostility on display towards him by others while he was in the US to attend the May 12-13 ASEAN-US Special Summit in Washington, DC. In an audio