MoUs signed in hopes of boost­ing rice ex­ports to China

The Phnom Penh Post - - BUSINESS - Hor Kim­say

THE Cam­bo­dian gov­ern­ment signed two mem­o­ran­dums of un­der­stand­ing (MoUs) with three gi­ant Chi­nese state-owned in­sti­tu­tions yes­ter­day, cre­at­ing part­ner­ships in­tended to boost the pro­duc­tion of Cam­bo­dian paddy rice and milled rice for ex­port, ac­cord­ing to a re­lease from the Min­istry of Econ­omy and Fi­nance.

The first of the two MoUs out­lines a gov­ern­ment-to-gov­ern­ment ar­range­ment to fur­ther open mar­ket ac­cess and fa­cil­i­tate growth of Cam­bo­dian rice ex­ports to China, the King­dom’s sin­gle largest rice im­porter, while the sec­ond deal pro­vides tech­ni­cal as­sis­tance in­tended to en­hance the King­dom’s rice ware­house and stor­age in­fra­struc­ture.

“This project is de­signed to re­solve the chal­lenges in the Cam­bo­dian rice sec­tor to en­sure long-term sus­tain­abil­ity, and to ad­dress these is­sues sys­tem­at­i­cally and com­pre­hen­sively,” the state­ment said.

The state­ment did not pro­vide fi­nan­cial de­tails on the value of ei­ther of the deals, but did say that the Cam­bo­dian gov­ern­ment will seek con­ces­sional loans from China to im­ple­ment the projects.

Of­fi­cials from the Min­istry of Econ­omy and Fi­nance and the Min­istry of Com­merce rep­re­sented Cam­bo­dia yes­ter­day, as they signed the first deal with both the Ex­port-Im­port Bank of China and CITIC Group Cor­po­ra­tion and signed the sec­ond deal with both CITIC and a Chi­nese con­sor­tium called He­nan Yuguang In­ter­na­tional Eco­nomic & Tech­ni­cal Co­op­er­a­tion.

Ac­cord­ing to a re­port re­leased last week, Cam­bo­dia has ex­ported 142,768 tonnes of milled rice to China so far this year, a 59 per­cent in­crease from the same pe­riod last year ac­count­ing for nearly one-third of the coun­try’s to­tal rice ex­ports in 2017. Cam­bo­dia is ex­pected to ex­port a to­tal of 200,000 tonnes of rice to China by the end of the year, and hopes to in­crease its ex­ports to the coun­try by 50 per­cent in 2018.

Song Saran, CEO of Amru Rice Cam­bo­dia, whose com­pany re­cently ob­tained a $5 mil­lion loan from the gov­ern­ment to build a mas­sive stor­age and dry­ing fa­cil­ity in Kam­pong Thom prov­ince, said yes­ter­day that these MoUs rep­re­sent pos­i­tive gov­ern­ment ini­tia­tives.

De­spite un­met lo­cal de­mand for paddy rice, Saran said that there is an an­nual out­flow of about 4 mil­lion tonnes of paddy rice to other coun­tries dur­ing har­vest sea­son be­cause of the in­dus­try’s in­abil­ity to process the rice lo­cally.

“Hav­ing enough ware­house and stor­age in­fra­struc­ture will help pre­vent the out­flow of paddy rice, es­pe­cially fra­grant rice, to our neigh­bour­ing coun­tries dur­ing har­vest­ing sea­sons,” he said, adding that this will en­sure food se­cu­rity es­pe­cially in the event of a nat­u­ral dis­as­ter.

“China is a po­ten­tial mar­ket for a lot of Cam­bo­dian prod­ucts, in­clud­ing many other agri­cul­tural crops,” he added. “We can build our Cam­bo­dian brand in the Chi­nese mar­ket via rice for now, and hope­fully this will open the door for other agri­cul­tural prod­ucts later.”

Mey Kalyan, se­nior ad­viser for Supreme Na­tional Eco­nomic Coun­cil (SNEC), said yes­ter­day that the King­dom has been in need of greater in­fra­struc­ture in the rice in­dus­try for a long time.

“Im­ple­ment­ing these projects will take some time,” he said. “But we greatly wel­come the MoU agree­ments made to­day, and we hope that these projects will be im­ple­mented sooner rather than later.”

HENG CHIVOAN

A rice farmer gath­ers rice grains for sale af­ter har­vest sea­son in Bat­tam­bang prov­ince.

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