Chinese president Xi Jinping on Monday said his country’s import quota for Cambodian rice will be raised by 100,000 tonnes.
For in depth analysis of Cambodian Business, visit Capital Cambodia
In a meeting with Cambodian Prime Minister Hun Sen, Mr Xi agreed to increase the quota to 400,000 tonnes for 2019, up from last year’s 300,000 tonnes. The meeting between the two heads of state took place in Beijing on Monday as part of Mr Hun Sen’s official visit to China.
Chan Pich, general manager of Signatures of Asia, said this was great news for the local rice sector, explaining that the Chinese rice market has immense potential for Cambodian exporters.
“Now that the quota has been raised, we urge China to also consider allowing more Chinese companies to buy our rice,” he said. According to Mr Pich, only state-owned COFCO is currently allowed to bring Cambodian rice into the country.
“Having only one company importing makes it difficult for Cambodian exporters and creates really tough competition,” Mr Pich said.
Last year Cambodia did not fulfill the quota for the Chinese market, shipping only 170,000 tonnes of the 300,000 allowed. Mr Pich said this is because only 26 local firms have Beijing’s approval to export rice to China.
Mr Pich called on China’s customs administration to speed up work auditing Cambodian rice millers and granting them permission to export to China, adding that there are many local firms that meet the requirements of the Chinese market but are still waiting for Beijing’s approval.
One of the 26 local firms certified by Beijing, Signatures of Asia sent 500 metric tonnes of rice to China in 2017. Last year, however, it shipped only half that amount.
Most rice exported to China is of the Sen Kro Ob (fragrant) variety, Mr Pich said, adding that China accepts all types of rice except broken rice.
Last year, China increased its import quota for Cambodian rice to 300,000 tonnes, from 200,000 tonnes in 2017 and 100,000 tonnes in 2016.
Cambodia exported 626,225 tonnes of rice to international markets last year, a drop of 1.5 percent compared to 2017.
China’s announcement that it will raise the import quota for Cambodian rice comes just five days after the European Union imposed tariffs on rice imports from Cambodia and Myanmar.
Last week, the EU re-introduced import duties on Cambodian rice, which will be steadily reduced over a period of three years. During the first year, 175 euros ($199.5) per tonne will be levied, 150 euros ($171) in the second year, and 125 euros ($142.5) in the last.
Mr Pich said that Chinese buyers tend to pay less for Cambodian rice than European firms but generally buy larger quantities. While a European firm usually buys 1 to 5 containers at a time, a Chinese company may purchase up to 20, he added.