Cambodia has proposed that it and Thailand establish a government–private sector working group to tackle agriculture export issues, particularly cassava raw material exports which have been a challenge for Cambodia recently.
For in depth analysis of Cambodian Business, visit Capital Cambodia
Agriculture Minister Veng Sakhon told Ladawan Wongsriwong, adviser to Thailand on domestic and international socio-economic matters, that the main issues for agricultural products between Cambodia and Thailand in the past years were prices, market access and infrastructure to support the production chain.
“Intermediaries are always lowering the price of cassava, so farmers are stuck with the product,” Mr Sakhon said.
“Farmers have no market and make a loss.
“In addition, Cambodia does not have enough infrastructure, especially a processing factory to support the production chain. This means it mainly depends on neighbouring countries,” Mr Sakhon said.
He acknowledged Thailand’s role in supporting Cambodian agriculture, particularly cassava products. He said Cambodia had about 700,000 hectares growing cassava which yielded about 14 million tonnes in 2017.
The minister suggested his Thai counterpart establishes the government–private sector working group involving both nations for consultations to solve all outstanding issues and push the export of raw cassava material to Thailand as much as possible.
He added that all cassava businessmen should sign contracts with farmers to build trust, market access and the sustainability of cultivation.
Mr Sakhon said Cambodia would soon have ten cassava-processing factories as a result of investment by Hong Kong, which announced that construction of the first factory would start next month.
In response, Ms Wongsriwong promised to tell Thai businessmen buying raw cassava material in Cambodia to compete based on free market principles.
She also suggested that her Cambodia counterparts produce cassava to supply the processing factories to build investors’ trust and produce cassava as a raw material to export to neighbouring countries.
In late January, Green Leader Holdings Group Limited, a Hong Kong-based investment holding firm, signed a memorandum of understanding (MoU) with the Ministry of Agriculture, agreeing to invest in local cassava plantations and set up 20 plants to process cassava starch for export.
In the next three years, 10 plants will be raised with a capital investment of $150 to $200 million. They will be built in Tboung Khum, Kratie and Stung Treng, among other provinces, according to Michael Tse, Green Leader’s CEO.
Each plant will have a production capacity of 100,000 tonnes of cassava starch per year.
“We are signing this MoU because we see great potential in the cassava sector,” Mr Tse said. “Fourteen million tonnes of cassava are produced each year. We will utilise this raw material and process it into a product ready for the consumer.”
Ninety percent of all cassava grown in Cambodia is shipped to Thailand and Vietnam to be processed.