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Chasing China’s rice import potential

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Chea Chor (left) helps his father, Chea Mang Song, load rice seedlings on a cart so they can be transported and re-planted in Phnom Penh’s Dangkor district last month. Photo by: Pha Lina

Chea Chor (left) helps his father, Chea Mang Song, load rice seedlings on a cart so they can be transported and re-planted in Phnom Penh’s Dangkor district last month. Photo by: Pha Lina

CHINA National Cereal, Oil and Foodstuffs Corporation (COFCO) is the latest mainland Chinese company to sign a deal to export Cambodian rice.

The deal inked with Cambodia’s Angkor Rice provides for exports of 1,000 tonnes of rice.

COFCO is one of a number of Chinese companies that have signed similar deals with their Cambodian counterparts, but  direct rice exports to China are yet to begin in earnest.

Cambodia’s rice exports are awaiting approval from Chinese inspectors, experts say.

A protocol signed between the two countries in October last year states that rice samples must be free of agricultural pests that experts say are endemic in Cambodian rice fields.

“The Chinese are very strict on quality,” Phou Puy, president of the Federation of Rice Millers Associat-ions and the Baitong Rice Export Company, said.

“So far, we haven't received any updated information on the inspect-ions from the Ministry of Agricult-ure, Forestry and Fisheries. But I know their delegation will come to test our quality soon.”

Baitong Rice Export, which signed an MoU with a Chinese company late last year, plans to export 10,000 tonnes of rice a year to China, beginning next year.

Phou Puy said certification from the People’s Republic was not far off.

China’s rice market was vast but, as with many nations in East Asia, the import policy in China was highly protective, CEDAC president Yang Saing Koma said.

“The goal of China’s agriculture policy is to protect its own agriculture,” he said.

Rapid industrialisation had brought a move away from agriculture in China, potentially making room for rice trade with Cambodia, Yang Saing Koma said.

Government-controlled prices on Cambodian exports might be more of a concern than actually passing sanitat-ion inspections, he said.

Plans for a Cambodian rice-testing laboratory, required by Chinese inspectors to allow Cambodian imports, are also under way.

Agriculture, Forestry and Fisheries Minister Chan Sarun and Chinese Commerce Minister Chen Jian signed a memorandum of understanding last Saturday confirming the two nations’ co-operation on a testing laboratory.

Kith Chankrisna, assistant chief  executive of rice exporter Soma Group, said the project would take a year to complete.

Some experts, however,  say certification could be much further off than many assume.

The four pests targeted by Chinese inspectors were endemic in Cambodia and attempting to abide by Chin-ese regulations would not be cost-effective, Agriculture Development International  director Tim Purcell said.

“Practically speaking, it would be very difficult and very expensive. You would need to go into every rice field in the country and spray for [the pests],” he said.

Nevertheless, Cambodian companies continue to ink export deals with Chinese firms.

Soma Group had signed a memorandum of understanding  last Saturday with China’s Yunnan Provincial Overseas Investment Comp-any for 20,000 tonnes of rice a year, Kith Chankrisna said.

It hoped to begin exports next year, he said.

Last week, Cambodia’s TTY Group reportedly signed a contract with Sinograin for 20,000 tonnes of rice exports  a year.

Khem Chenda, an administrative director at the Ministry of Agriculture, Forestry and Fisheries, confirmed Chinese inspectors had been active in the Kingdom this year.

Several Cambodian and Chinese companies had signed contracts in July foll-owing a visit by inspectors, signifying confidence in fut-ure rice deals between the two countries, he said.

“I see some Chinese companies are signing contracts with  local firms. I think this is the result from the meeting [with inspectors],” Khem Chenda said.

Prime Minister Hun Sen has announced a policy targeting one million tonnes of milled rice by 2015.

In the first six months of 2011, rice exports more than quadrupled to 80,442 tonnes, worth $45.7 million, compared with the same period last year, according to Ministry of Commerce statistics.

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