China will agree to buy 400,000 tonnes of Cambodian rice in a memorandum of understanding that will be signed tomorrow in Beijing, according to the Cambodian Ministry of Commerce.
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The agreement will be signed by local company Green Trade, who will be representing the Cambodian Ministry of Commerce, and COFCO, China’s largest food processor, during a forum on the Belt and Road Initiative (BRI).
“Led by Prime Minister Hun Sen, the two sides will sign a MoU at the second forum of the Belt and Road Initiative to be held in Beijing on April 27,” the statement reads.
According to the ministry’s statement, China agreed to buy 400,000 tonnes of jasmine, fragrant, and white rice from Cambodia from August 2019 to December 2020.
It adds that the memorandum will become effective after the two parties implement a previous agreement, signed on Jan 2018, to sell 300,000 tonnes of rice.
Hun Lak, vice president of the Cambodia Rice Federation, said the agreement is great news for the sector.
“It will allow us to expand trade with China,” he said.
“In 2018, we signed a similar MoU with China to export 300,000 tonnes of rice,” he said, noting that Cambodia was not able to fulfill that quota.
“Because we exported to other countries, we did not have enough rice to supply China to meet the quota,” he said.
“This time, we will try to save more rice to send to China so that we can meet that quota.”
The expansion of the import quota for Cambodian rice was announced by Chinese president Xi Jinping during a meeting with Mr Hun Sen in January.
The announcement came a few days after the European Union imposed tariffs on Cambodian Indica rice.
Mr Xi also said China will strive to boost trade with Cambodia to $10 billion by 2023. Bilateral trade is currently at $5.6 billion.
Cambodia exported 75,214 metric tonnes of milled rice to China during the first quarter of 2019, a 59 percent rise compared to the same period last year, according to the Secretariat of One Window Service for Rice Export Formality.
From January to March, China was the biggest buyer of Cambodian rice. It accounted for 44 percent of Cambodia’s total rice exports.