Cambodia and China on Wednesday signed a commercial agreement to boost the production of Cambodian paddy rice and milled rice for export by building 12 warehouses and 10 silos in 11 provinces in a move to boost the country’s rice exports to the Chinese market.
The agreement was signed between Commerce Minister Pan Sorasak and Chen Xiaojia, president of China’s CITIC Construction, at the Economy and Finance Ministry.
“The project is designed to help farmers, businessmen and milled rice exporters as well as to support the government’s rice export policy that targets to export 1 million tonnes of milled rice per year by constructing warehouses and silos at the designated areas,” a statement from the Ministry of Economy and Finance said. “At the same time, it also helps to curb the price fluctuation made by the brokers and helps farmers to store their paddy rice longer so that they can sell their paddy in an appropriate price.”
The statement noted that the agreement does not cover rice mills to avoid any competition with local millers.
Song Saran, president of Amru Rice Cambodia, one of the largest rice millers and exporters, welcomed the move saying that it will help to boost the country’s rice storage capacity for export.
“We in the private sector, welcome the move and will cooperate with the government to improve the quality of our rice and boost our exports,” he said. “With this agreement, I think we need to have good management of the warehouses and silos because it is very important to maintain the quality of the rice to meet Chinese standards.”
“I do believe that CITIC Construction will build warehouses and silos in line with the needs of the Chinese market,” Mr Saran added.
He said that the country faces a problem to meet the export quota set by China because China only wants to buy good quality rice, conforming to its sanitary and phytosanitary (SPS) standards, and also pricing.
“So, we need to conduct studies on our farming, seeding, storage and milling methods and cooperate with the Chinese to ensure that the whole supply chain meets their market standard,” Mr Saran noted.
In April, China agreed to buy 400,000 tonnes of jasmine, fragrant, and white rice from Cambodia from August 2019 to December 2020, an increase of 300,000 tonnes from last year’s quota.
According to the announcement from the Ministry of Economy & Finance, under the agreement, state-owned Green Trade and Chinese-owned CITIC Construction will jointly build 12 warehouses that can store 827,000 tonnes of rice and 10 silos that can dry some 13,000 tonnes per day.
The warehouses and silos will be built in Pursat, Battambang, Takeo, Banteay Meanchey, Siem Reap, Kampong Thom, Kampong Cham, Prey Veng, Kandal, Kampong Speu, and Preah Sihanouk provinces.
Cambodia exported 75,214 metric tonnes of milled rice to China in the first quarter of this year, a 59 percent rise over the same period last year, according to an official report from ministry of agriculture.
China was the biggest buyer of Cambodian rice during the January-March period this year, accounting for 44 percent of the country’s total rice export.
According to the report, Cambodia exported a total of 170,821 tonnes of milled rice in the first three months of this year, up six percent over the same period last year. It showed that the Kingdom exported 51,552 tons of milled rice to the European markets during the period, down 33 percent because European Union tariffs, imposed earlier this year, on rice exports from Cambodia in a bid to curb a surge in rice imports from the Kingdom.
Cambodia produced 10.8 million tonnes of paddy rice last year, up 3.3 percent year-on-year, according to the Ministry of Agriculture.