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Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom's sugar exports to EU plummet

Kingdom's sugar exports to EU plummet

Evictees watch a building burn next to a sugar plantation in Oddar Meanchey after authorities set it alight during a 2009 land eviction. Photo supplied
Evictees watch a building burn next to a sugar plantation in Oddar Meanchey after authorities set it alight during a 2009 land eviction. Photo supplied

Kingdom's sugar exports to EU plummet

New figures show that Cambodia’s sugar exports to the European Union fell by 94.8 per cent between 2013 and 2015, amid accusations of rights abuses and land grabbing in the Kingdom’s industry.

Cambodian sugar receives preferential treatment under the Everything But Arms trade scheme for least developed countries, and in 2013, exports peaked at 65,500 tonnes, worth some €38 million (currently $42.2 million).

But following publicity surrounding land grabs and allegations of child labour in Koh Kong, Kampong Speu and Preah Vihear provinces, exports declined to 38,000 tonnes, worth €15.6 million, in 2014.

Now, new figures provided by the Delegation of the EU to Cambodia show that last year EU countries imported only 3,400 tonnes, worth just €1.8 million.

A “Clean Sugar” campaign launched by a coalition of rights NGOs in 2011 targeted Thai sugar companies operating in Cambodia such as MitrPhol and Khon Kaen Sugar Industry, Cambodian sugar baron Ly Yong Phat’s Phnom Penh Sugar and buyers including multi-national sugar firm Tate and Lyle and Coca-Cola.

Eang Vuthy, executive director of coalition member Equitable Cambodia, said the campaign was responsible for the drop in exports. “The sugar companies, both in Koh Kong and Kampong Speu, have complained about this, because they could no longer export their sugar to the EU,” Vuthy said.

A statement from the EU delegation to Cambodia said it was difficult to speculate on the reasons for the trade decrease while admitting the bad publicity was a possible factor.

“It is clear that the concerns on the risk of possible accusations of complicity with alleged land grabbing and human rights abuses related to sugar cane production in Cambodia is discouraging EU importers to source from Cambodia, and the private sector to further invest in this industry,” the statement reads.

“But it should also be noted that the prices of sugar on the EU market have been declining since 2011 … bringing them closer to the world market price. Therefore it could be assumed that there could be an increased interest of Cambodia sugar producers to diversify their exports to markets outside the EU.

“However, the overall imports of sugar by the EU continue to grow, which indicates that the EU market remains attractive for countries that, like Cambodia, benefit from a preferential access to the EU sugar market.”

John Stansfield, a sugar industry analyst for independent soft commodities trader Group Sopex, said he suspected the decline was thanks to Tate & Lyle’s sourcing policies. “They were the main buyer of Cambodian raw sugar and a change in their internal policy is the most likely reason for the reduction in imports,” Stansfield said in an email.

“The latest data from the EU covering the period since Oct 1st 2015 has the EU import[ing] 20 tonnes only from Cambodia,” he added.

Chea Socheat, chief of the Bureau of ASEAN and Economic Integration at the Cambodian Ministry of Commerce, said he did not know whether the trade decline was because of the negative publicity, saying sugar exports were dependent on “supply and demand”.

“In the past few years, Cambodia has had problems with villages to do with sugar cane planting land, but we already solved them,” Socheat said. “It could be one of the reasons that we didn’t have sugar exports to those countries.”

In 2014, the European Union agreed to investigate claims of rights abuses and set up a mechanism for “remedial measures”, a process that still has yet to show any results.

Moeun Tola, director of rights NGO Central, said it was up to the EU to “clean up” the EBA agreement and ensure that agricultural development programs benefited poor Cambodians and not just the wealthy and multinational companies.

“The European [parliament] should strictly examine the implementation of the EBA,” Tola said. “So far, the EU’s audit has not been transparent.”

Meanwhile, Am Sokha, case coordinator at the Community Legal Education Centre, which is also a member of the NGO coalition, said the trade decline sent a clear message to the Cambodian industry to clean up its act.

“The companies should study environmental and social impacts and consult with the people and deal with those impacts with transparency and fair compensation,” he said. “These measures will restore the sugar industry’s reputation.”

Phnom Penh Sugar could not be reached for comment.

Additional reporting by Bun Sengkong and Vandy Muong

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