China remains the main source for Cambodia rice exports according to just-released data from the Cambodia Rice Federation (CRF).
The CRF’s figures show that in the first quarter of 2020, 44 percent of Cambodia’s milled rice was shipped to China or 101,345 tonnes. This represents a 35 percent increase on the same period last year.
In its role as a key promoter of the sector, CRF also revealed that in terms of international markets, a total of 230,948 tonnes were exported in the same period this year. This represents a 35 percent hike on the same three months last year (January – March).
Lun Yeng, CRF’s secretary general, told Khmer Times that in addition, Cambodia exported 70 percent of its fragrant rice stock to the Chinese market in the first quarter of the year. Of this, 30 percent is white rice.
With the government’s order last week to stop all exports of white rice from April 5 to help meet domestic demand during the economic downturn caused by the COVID-19 pandemic, concern has rippled through the sector of the detrimental effect it will have.
But with white rice accounting for just 15 percent of total international exports of the milled commodity, Lun has argued that the potential damage is not likely to be as harsh as the industry may expect.
“This will not likely effect or disrupt the volume of our rice export because the white rice price is a bit lower than the fragrant ones. So, the customers will purchase the fragrant variety when there is a lack of white rice supply,” he said.
In light of the global pandemic, many countries around the world have put border restrictions in place to fight the outbreak. A particular hurdle facing Cambodia’s rice export sector is the blocking of a Vietnamese port from which the country sends between 40-60 percent of the staple to international markets. From there it is sent directly to China to be distributed to Shanghai and cities in Fujian.
“The solution is for all international milled rice exports, especially those destined for China, to be shipped through Sihanoukville Autonomous port, the Kingdom’s only deep-sea port,” Lun said.
Of 400 Chinese companies granted licences to import rice from other countries, only 20 are currently allowed to import rice from Cambodia. These include the China Oil and Foodstuffs Corp (COFCO), one of the nation’s state-owned food processing holding companies, which has been given the right to import a quota of 400,000 tonnes.
Chan Pich, general manager of export company Signatures of Asia, told Khmer Times that the demand of rice is growing substantially while, at the same time, prices also increase remarkably.
He noted that his company exported around 5,000 tonnes during the first three months, up about 60 percent in comparison to 2019 when it was just 3,000 tonnes. “Ninety percent of our rice export is to the European Union – including Spain, Italy and France – and the rest goes to China and other destinations,” Chan said.
Both Chan and Lun acknowledged some rice exporters are facing the same problem regarding a slow process of payments from buyers within some countries in the EU, explaining banks were temporarily shut down amid the COVID-19 infection case rise in the bloc. But they said that there is still a high demand in every market destination.
Chan added that the price for the fragrant varieties – especially Romdoul and Malis – was up to $900 per tonne from $770 per tonne when compared with the early harvest season in November 2019. Cambodia exported 70,040 tonnes of rice to the EU, or equivalent to 30 per cent of the total export during the first three months, an increase of 36 per cent over the same time last year.