Local rice miller and exporter, QC Rice Company, signed a memorandum of understanding (MoU) yesterday with Chinese agricultural firm, Rizhao Rui Energy Trading Company, a partnership that will see the two businesses trade in rice and agricultural machinery.
The deal sees Rizhao Rui Energy Trading Company agree to import 250,000 tonnes of Cambodian rice from QC Rice, while the Cambodian rice producer has agreed to import $4 million worth of farm machinery from its Chinese partner.
The agricultural equipment includes plough tractors, rice transplanting machines and harvesting machinery, according to Taro Ichiro, executive director of QC Rice Co.
The machineries, he said, will be used to help farmers contracted to QC Rice across six provinces where the lack of labour and farming equipment is hindering production.
“We want to speed up paddy rice production and increase farmers’ revenues,” he said. “Using machinery is an efficient tool to help them, also we want to guarantee on-time delivery and quality rice for buyers,” he added.
While QC Rice exported only 120 tonnes of rice last year, Ichiro, said the MoU will help boost its exports.
Rizhao Rui Energy Trading Company is part of Wuzheng Agriculture Machinery, and along with producing a wide range of agricultural machines, the company also has more than 100 distribution channels for rice in China, said Jun Kong, CEO of Rui Energy International.
“The MoU will help us to introduce Wuzheng machineries to Cambodia’s market and with the existing channels for rice and cassava in China, it is good for the two companies to work together,” he said.
The first rice export will occur by the middle of the year, he added.
China’s import quota of 100,000 tonnes of rice from Cambodia is something Kong said the company would be seeking to lift in order to allow the 250,000 tonnes anticipated in the deal.
David Van, senior adviser to the Cambodia Rice Federation, said that the federation is always “hopeful and supportive to any of our rice exporters to be able to increase exports to the huge market right next door, which is China”.
Van said the Chinese quota of 100,000 tonnes was due to end in the first quarter of this year, and it was up to the Ministry of Commerce to negotiate an increase with the Chinese government. Rizhao Rui Energy Trading Company, being private company, would also need to engage the Chinese authorities, Van added.
The Ministry of Commerce could not be reached for comment yesterday, however, in August, the commerce minister said he had requested an increase in Cambodia’s rice quota to 500,000 tonnes.