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Crisis talks on threat to rice imports

Sok Chan / Khmer Times Share:
Rice farmers storing the crop on the outskirts of Phnom Penh. There are fears it could be heavily taxed by the US. KT/Chor Sokunthea

The Commerce Ministry and Cambodia Rice Federation (CRF) had an urgent meeting about the USA Rice Federation to the The United States International Trade Commission (USITC) on the eliminating a trade benefit on rice imported to US including fromCambodia.

The meeting was led by Seang Thay, secretary of state and the spokesman for the Ministry of Commerce, and CRF’s president Song Saran, and other CRF members and commerce officials. It aims to collect all input related to the USA Rice Federation’s request USITC to the eliminate the US’  Generalised scheme of preferences (GSP) on imported.

The CRF said the US is now moving to a final discussion to omit the list of commodities eligible under the GSP on imported rice to the US from Thailand, Vietnam, Brazil, India, Burma and Cambodia.

Saran exported rice from Cambodia to the US has not caused any impact on farmers because exports of milled rice from Kingdom to US are just 2,000 tonnes per year and the varieties of milled rice exports to the US is organic and fragrant Indica rice, which is different from the rice that US farmers grow such as Japonica and Carlrose cice.

“Cambodia rice can make the consumer healthy so they should not delete the GSP on  imported milled rice from Cambodia to the US market,” said Saran.

However, the group will continue discussing further with policy institutions and relevant ministries soon to find an appropriate solution.

Thay said that the meeting on Monday was just a technical meeting to collect the inputs from all relevant stakeholders. However, no decision has been made. He added that Cambodia exports of rice to the US were 1,819 tonnes last year, worth around $1.672 million. However, in the first half of 2020, the exports of Cambodia rice to US was 1,100 tonnes, worth around $1.014million.

Cambodian rice exports to the US could face full tariffs after a lobby group called for the imposition of full tariffs on the crop. Currently, the Kingdom’s rice enjoys some tax-protection under the GSP-eligible commodities list.

However, lobbyists USA Rice last month provided virtual testimony to the United States International Trade Commission in support of removing Cambodian rice from the list.

It submitted a petition to the Office of the US Trade Representative (USTR) in March advocating for the removal of rice from the list of GSP-eligible commodities. The petition has since moved forward into the formal review process, including a concurrent analysis by the USITC.

USA Rice said most developing countries are eligible for duty-free access for parboiled rice only. However, all rice from the “least developed countries” such as Cambodia and Myanmar, are eligible for duty-free access into the US.

Rice-grower organisations representing the six major rice-growing US states signed a joint letter with their corresponding state farm bureau organisations lending their support to the USA Rice petition. Cambodia’s rice sector officially lost its import duty exemption granted by the EU in January 2019 after the bloc decided to impose tariffs on imports from the Kingdom and Myanmar
to protect European rice farmers’ interests. That loss comes into effect on Aug 12.

Cambodia’s milled-rice exports increased 42 percent to 397,660 tonnes, valued at $264.5 million in the first half of this year from the 281,538 tonnes in the same period last year.

Rice exports to the EU increased by more than 45 percent. To China they rose by 25.2 percent. Other Asean members increased Cambodian rice imports by about 47.7 percent. Other market destinations surged by 79.26 percent. Cambodia expects to export between 800,000 tonnes to
1 million tonnes of milled rice this year.

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