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Rice exports to EU to be hit by tariffs

Sum Manet / Khmer Times Share:
cambodia EU
Maxpixel/CC0 & Reuters

Cambodia is looking for new markets abroad for its rice, following news of impending tariffs in the European Union.

Hun Lak, vice president of the Cambodia Rice Federation, said the EU intends to impose tariffs on Cambodian rice based on complaints raised by Italy and Spain.

“They produce their own rice and they requested that the EU protects their rice instead,” Mr Lak said.

“We enjoy the benefits of the Everything-but-arms (EBA) treaty, but the new tariffs will affect our export to the EU by making our rice less competitive.

“We must diversify away from the EU market. We are looking at China, one of the biggest markets for Cambodia,” Mr Lak said, adding that Cambodia needs to continue to reduce the cost of production and transportation while enhancing quality.

Italy, along with six other European Union countries, filed a request to the European Union to activate a ‘safeguard clause’ that allows EU member states to impose barriers to protect against trade imbalances.

Fragrant rice now sells for $900 per ton, while white rice fetches $500 per ton, said Mr Lak.

The EU intends to impose tariffs of 175 euros per ton during the first year, 150 euros in the second year, and 125 euros in the next.

Song Saran, CEO of Amru Rice Cambodia, commented on the ‘safeguard clause’ on his Facebook profile.

“It is totally biased. The Italian and Spanish farmers switched to Japonica variety because they get higher profit margins than they do with the Indica variety. Then they blamed Cambodia and Myanmar for exporting cheap Indica rice to the EU.

“Our farmers have to switch to other varieties and diversify their markets to keep fighting for survival. No one will help us, only Khmers can help Khmers,” Mr Saran commented.

According to figures from the Ministry of Agriculture, Cambodia exported 389,264 tonnes of rice in the first nine months of 2018, a drop of 8.4 percent. China continues to be Cambodia’s top export market.

In November last year, Cambodia signed memorandums of understanding with the Export-Import Bank of China and CITIC Group Cooperation to help the Kingdom increase paddy production and boost rice exports.

The agreements aim to increase rice exports to China beyond the 300,000 tonnes now allowed by the quota in place.

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