China has not yet purchased milled rice from Cambodia for the period 2019-2020, with the country still trying to fulfill its quota for the year 2018.
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Kao Thach, CEO of Rural Development Bank (RDB), told Khmer Times that Cofco – China’s largest food processor, manufacturer and trader – has not placed any orders yet for Cambodian milled rice for the year 2019. The quota for 2019 is 400,000 tonnes.
“We don’t know whether they will purchase our rice or not. It seems like they don’t want to buy, so we are pushing,” he said.
Mr Thach noted that some local rice exporters are shipping rice to China based on the quota for 2018 – 300,000 tonnes.
“We are afraid that when the quota for 2018 is complete, we won’t receive new orders. It is difficult to sell,” Mr Thach said.
China has pledged to purchase 400,000 tonnes of rice from Cambodia this year. The pledge was made in January during a meeting in Beijing between Prime Minister Hun Sen and Chinese president Xi Jinping.
From January to October this year, Cambodia shipped 184,844 tonnes of milled rice to China, according to the Secretariat of One Window Service for Rice Export Formality (SOWS-REF).
Exports to China accounted for 40 percent of Cambodia’s total exports of 457,940 tonnes, a 5 percent hike over the corresponding period last year.
In 2018, the Kingdom was unable to meet its rice export quota in the Chinese market, shipping only 170,000 tonnes out of the 300,000 allowed.
Lun Yeng, secretary-general of the Cambodian Rice Association, said that until this month, Cambodia is shipping rice to China based on the quota of 300,000 tonnes set for 2018. He said the old quota must be fulfilled before the new quota of 400,000 tonnes for 2019 can begin.
“Now we have almost completed the old quota of 300,000 tonnes since we had a very small amount left. Next month we will complete the old quota, and we will continue with the new one,” he added.
“We already have a quota for 2019, but China has not implemented it yet because first it has to complete the old quota for 2018,” Mr Yeng added. “We do not have a fix contract with China, so when they want to purchase, they will discuss the price and request a quote from us. No price is set in advance,” he added.
“For the new export quota of 400,000 tonnes for 2019, we already signed an initial agreement on November 5 in Shanghai for 125,000 tonnes. This means that for the period 2019-2020 they will buy at least 125,000 tonnes as per this agreement,” Mr Yeng said.
In principle, the new quota should be implemented this November, but they start with a lower amount, Mr Yeng noted.
“Now, China’s Cofco is not purchasing, so our rice millers are considering whether they should buy more rice to store in their warehouses or not,” he added.
Mr Yeng said rice millers have already purchased paddy from farmers and now all warehouses are full because China has not placed new orders yet.
“If China starts ordering, rice millers can start purchasing paddy from farmers. They can clear the old stock and purchase new one,” he added.
According to the figure from SOWS-REF, the European Union is the second-biggest buyer of Cambodian rice, purchasing a total of 155,950 tonnes of milled rice from January to October – an increase of 34 percent when compared with the same period last year.
The report showed that 83 companies exported Cambodian rice to the international market, including Baitang (Kampuchea) Plc, the biggest rice exporter, who shipped 60,358 tonnes. Amru Rice (Cambodia), the next biggest exporter, shipped 41,068 tonnes.