With $10 million in financial assistance provided by the Asian Development Bank (ADB), selected rice millers in Battambang, Kampong Thom, and Prey Veng provinces will soon build warehouses and silos to expand their storage capacity.
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Kao Thach, director of the state-own Rural Development Bank, told Khmer Times yesterday that a total of six rice millers will gain access to the money to build the storage facilities.
Mr Thach said five companies have already signed agreements with RDB to take out the loans. The last rice miller will soon be selected, Mr Thach said, adding that this sixth company will be based in Prey Veng province.
The first five agreements were signed between the companies, RDB, and the Climate Resilient Rice Commercialisation Sector Development Programme (Rice-SDP) of the Ministry of Economy and Finance last week.
“So far, we have signed deals with five rice millers: two in Battambang, two in Kampong Thom and one in Prey Veng province,” he said, adding that two storage facilities will be built in each of these provinces.
Mr Thach said the loans mature in 10 years but did not go into details regarding the interest rate.
“The goal of these loans by ADB is to boost rice millers’ exports,” he said, adding that when having access to enough storage room, these companies will buy more from farmers, helping stabilise the price of paddy rice.
According to the latest report from the Ministry of Agriculture, during the first nine months of the year, Cambodia’s exports of milled rice grew by a moderate 2.3 percent compared with the same period last year.
The same report notes that China was the largest buyer of Cambodian milled rice, importing 157,793 tonnes from January to September. This is equal to 40 percent of Cambodia’s milled rice exports. China is followed by France and Gabon, with 53,723 tonnes and 21,682 tonnes, respectively.
Earlier this year, the European Union imposed tariffs on imports of Cambodian rice to protect European producers.
As a result of the levies, during the first half of 2019, Cambodia’s milled rice exports to the EU fell by almost 50 percent compared with the first half of 2018, Lun Yeng, secretary-general of the Cambodian Rice Federation, told Khmer Times in August.
“Overall, exports to the EU are down, but, fortunately, exports to other markets are increasing,” he said.
He pointed out that the local rice sector continues to thrive, mostly due to a rise in shipments to China.
The Rice Federation recently reaffirmed its commitment to grow the country’s rice exports to 1 million tonnes a year by 2022. This goal was originally set for 2015 but was not achieved.