Millers push for China access
Cambodia Post hopes to deliver for e-giants
AMID concerns that the European Union could reject shipments of Cambodian rice, exporters are pushing for more access to China as an alternative market for the Kingdom’s principal agricultural commodity.
Hun Lak, vice president of the Cambodia Rice Federation (CRF), said just 26 Cambodian millers have satisfied China’s sanitary and phytosanitary (SPS) standards, making them eligible to export rice to the Chinese market. However, another 55 millers “have the quality and capacity to export to China” and have requested an inspection by China’s AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) to approve their shipments for export.
“We met Ministry of Agriculture officials to seek their assistance in opening the door wider for rice exports to China,” Lak said yesterday. “We hope that officials from AQSIQ China will come to inspect the rice millers’ production lines soon.”
According to Lak, Cambodia’s rice industry has struggled since 2015, with about 10 millers forced into bankruptcy and others deep in debt. He said the global market has become increasingly “narrow and strict”, and unless Cambodian exporters can develop new markets the rice industry could soon collapse.
The latest challenge to the sector is the EU’s call on farmers to eradicate the use of the fungicide Tricyclazole in rice production. The European Commission has given Cambodian producers of white rice until June and fragrant rice until December to meet its revised threshold levels – 0.01 milligrams of Tricyclazole residue per kilo of rice, far below the current limit of 1 milligram per kilo.
While the extent of Tricyclazole use in Cambodia is unclear, Lak said it could be difficult for producers to ensure the compound’s complete eradi- cation in such a short timeframe.
“We are concerned that if we cannot comply with their requirement we will lose this market, even though we have requested that the EU give us more time to build our capacity before the regulation comes into effect,” he said
The EU is Cambodia’s largest market for rice, accounting for 63 percent of the 542,144 tonnes the country exported last year. China, however, has grown to become a major buyer in recent years, importing 127,460 tonnes of Cambodian rice last year and agreeing to import up to 200,000 tonnes this year.
Song Saran, CEO of Amru Rice, one of the country’s biggest exporters, said that while the EU’s decision to eradicate Tricyclazole poses a challenge, Cambodia’s use of the fungicide was still quite limited compared to its rival rice-producing neighbours.
“It’s a new challenge for us, but we should be able to manage as this chemical is not used extensively in rice production here,” he said. “However, the government should control rice imports and smuggling to prevent low-quality [tainted rice] from being mixed in with our exports.”
Saran said the Ministry of Agriculture should work quickly to have more rice millers approved for export to China given the market’s size and potential growth.
“The 26 [approved] rice millers will not be able to supply the annual quota set by our agreement with China,” he said.
Hean Vanhan, undersecretary of state at the Ministry of Agriculture, said rice millers need to understand more about the demands and criteria of buyers in order to compete in international markets.
“If they have suitable quality and standards they will be able to export their rice and expand their markets, including in big markets like China,” he said. STATE-OWNED Cambodia Post plans to launch a new e-commerce company in a move to latch onto the growth of online transactions in the Kingdom and diversify its revenue streams, a company executive said yesterday.
The new company, Cambodia Post E-Solution, will strive to partner with e-commerce giants such as China’s Alibaba Group and act as the distribution arm for deliveries while facilitating payments.
“We have prepared all the necessary steps to launch our e-commerce service by the second half of this year,” Ork Bora, director general of Cambodia Post, said yesterday during the company’s annual meeting.
Besides trying to garner support from international e-commerce platforms, the new endeavour would also pursue state partnerships.
“We want support from government institutions, for instance Apsara Enterprise to be able to sell Angkor Wat tickets online,” he said.
Cambodia Post E-Solution will also provide e-banking services and online courier services, as well as facilitate payments to relevant government institutions such as the tax department, he added.
Cambodia Post’s revenue increased by 74 percent last year to $9.45 million, compared to $5.42 million in 2015, according its annual financial report. Net profit in 2016 reached $586,481, a massive 195 percent jump.
Chum Borey, founder of Roserb.com, an online shop that specialises in cosmetics and clothing, said that while a statebacked e-commerce company would increase competition in the nascent sector, it would provide more consumer confidence for those venturing into digital shopping.
“More big operators in the market will help to improve customers’ perception about shopping online through public awareness,” he said. “It will also help the e-commerce sector develop faster.”
So Phonnary, vice president of Acleda Bank, said e-commerce activity has steadily been increasing over the years as shoppers shift to digital ordering. The bank itself launched an e-commerce payment gateway in 2015 and has now partnered with 10 other payment platforms.
“Consumers are more educated and understand the benefits of e-commerce,” she said. “There is a lot of potential to run a professional e-commerce company in Cambodia.”