Kingdom’s cashew deal with VN could be hard to crack: insiders
Chinese delegation scopes out Kingdom
THE Kingdom’s cashew nut industry is still struggling to maintain a stable market as community representatives say relying on local brokers is hurting farmers.
Cashew Nut Association director in Kampong Thom province Chhiv Ngy said on Monday that the body is still searching for reliable buyers to ensure stable prices.
The price, he said, currently fluctuates from broker to broker and that many were buying at around $2.50 per kg.
“The current price doesn’t mean we are suffering a loss, but it we don’t make much when the price depends on local brokers. We don’t have money on hand to stock the cashew nuts,” he said.
The association has held discussions with over 30 companies this year – from China, Korea, the US, Japan, Germany and India, but hasn’t been able to ink any deals thus far.
Cambodia and Vietnam signed an agreement earlier this year to greatly expand the Kingdom’s cashew exports by 2028, though no concrete plan has emerged to meet the target.
The Ministry of Agriculture and the Vietnamese Cashew Association ( Vinacas) signed a Memorandum of Understanding (MoU) to increase Cambodia’s exports to one million tonnes by 2028.
Exports stood at just 73,000 tonnes last year. Vinacas also gave the ministry a $66,000 grant to increase production.
The ministry’s director-general at the general directorate of agriculture Hean Vanhan said officials were studying farming methods in Vietnam, but planting in the Kingdom hasn’t begun as yet.
“The MoU with Vietnam is the first step in the process. The ministry is examining processing factories in order to add higher value to the product rather than exporting raw materials,” he said.
Recent data from the ministry showed that yields of raw cashews were generally one tonne per hectare in the Kingdom.
At that rate, around one million hectares of land – roughly the size of Ratanakkiri province – would need to be cultivated to meet the terms of the MoU.
Specialized Cambodian Produce factory manager Tep Lyhean who has had discussions with the cashew association, claimed it was hard to meet contract farming conditions as prices on the international market fluctuated.
Additionally, she said ensuring a quality product from farmers was difficult.
“We prefer to buy cashews directly from farmers rather than the association as the price is more affordable.
“We need to ensure the price and the quality of cashews as we have to compete on the international market, so it is hard to do contract farming,” he said. A GROUP of Chinese entrepreneurs are on a four-day visit to the Kingdom to explore investment opportunities to expand their presence in the country.
Organised by Tianxia Chaoshang Economics (TXCS), the group is by Li Songjian, the chairman of Mingyuan Group Limited.
On Monday the participants attended TXCS’ fifth annual conference in the capital where they heard from Sok Chenda Sophea, secretary-general of The Council for the Development of Cambodia (CDC) and Pung Kheav Se, the president of the Federation of Khmer-Chinese in Cambodia.
Speaking at the forum, Chenda Sophea said Cambodia is the most open and liberal country where investors can jump into any sector without capital control, and take money out of the country without restrictions.
He said the recent influx of mainland capital is not surprising as both China and Cambodia have a long history of diplomatic ties, as well as more flights between the two nations bringing in tourists.
“Five years ago, there were only about five flights per week connecting China and Cambodia, but now there are about 88 flights per week.
“When countries are more connected by air, water and land, this will not only help accelerate tourism but also push many other sectors,” he said.
Chenda Sophea told the Chinese delegation that there are at least 80 high-rise building projects in the capital, and most of them are funded by investors from China.
The group consists of 42 investors from 35 Chinese enterprises spanning the real estate, agriculture, technology, healthcare and biotech industries.
After arriving on Sunday the group is scheduled to meet with Prime Minister-designate Hun Sen on Tuesday.