The Cambodian rice sector has come a long way from the less than 30,000 tonnes exported in 2008. And when a rice policy was adopted in 2009, it boosted exports that today reach more than 600,000 tonnes on average a year.
In 2015, the government set a target for 1 million tonnes of rice exports by 2020. It will miss it this year with an expected 800,000 tonnes and has reset it for next year.
The amount, however, has remained far behind its neighbouring countries in the region with the sector rapidly increasing. An insider said there are many unresolved issues for this.
Vietnam, the third-biggest global exporter, has an opportunity to overtake Thailand in rice exports this year, with expected exports of around 6.5 to 6.7 million tonnes. Thailand is expected to export 5 million tonnes, a decline from a previous projection of 6.5 million tonnes.
The insider told Khmer Times that various issues have remained unresolved for years now despite the establishment of the Technical Working Group (TWG) #9 (Rice) five years ago when the Cambodian Rice Federation (CRF) was conceptualised.
“The Government Private Sector Forum (GPSF) process was disrupted for a few years and only once re-activated last year. Then the COVID-19 issue again prevented the GPSF from resuming thus many issues remained lingering within all the TWGs concerned, without a clear decision from the prime minister,” he said.
He added production and logistics costs including infrastructure bottlenecks remain a continuous challenge. While Thai and Vietnamese rice mills are strategically and purposefully located along waterways, Cambodian rice mills are located much further inland with an acute limitation of using either railways or waterways.
“Our logistics and infrastructure still need lot of work to make us more competitive and efficient,” he said, adding being squeezed between two rice-exporting giants, Thailand and Vietnam, where pricing has always been more competitive, Cambodia should focus on primarily fragrant rice Sen Kra Ob and Jasmine because, despite EU-imposed taxes, pricing remains acceptable there for these grains and Chinese and other importers are keen because the quality is good.
“We cannot compete on the Long Grain White Rice (LGWR) because Vietnam has beaten us for decades on this. We should just focus on a niche where we won’t compete on volume but more on quality,” he said.
Cambodia exported 536,305 tonnes of milled rice in the first 10 months of 2020, of which 421,132 tonnes were fragrant rice, according to the Ministry of Agriculture.
Adding to the high cost of production and transportation, it remains a long-haul exercise to get Cambodia’s irrigation system improved nationwide.
The country’s irrigation system has not been very well engineered nor managed in the past because several ministries have overlapping jurisdiction over it with an approach of just spending donors’ funding and digging irrigation channels sometimes in the wrong format or area.
Veng Sakhon, Minister of Agriculture, Forestry and Fisheries (MAFF), said that the lack of infrastructure, which is now being developed, has left the country far behind in the region.
“The infrastructures to support the production chain, logistics and transportation are being developed such as electricity supply, roads and ports – and we are almost done,” he said.
When asked how long it would take Cambodia to follow Vietnam and Thailand in term of rice exports, the minister said: “The challenges have remained and we need to develop our waterways to facilitate transportation to create more competitiveness. Vietnam has been trying hard to boost rice exports over the last few years because the country provides cheap processing and transportation.”
Cambodia produces more than 10 million tonnes of paddy a year and unofficially exports most of it to Vietnam to the tune of more than 2 million tonnes annually, according to figures from MAFF.
According to Sakhon, Cambodia is ranked number 4 in Asean countries as a rice exporter, behind Myanmar as the third exporter in the bloc.
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