AMRU Rice (Cambodia) Co Ltd, one of the Kingdom’s main rice exporters, has appealed to the EU to reconsider imposing a tax on the Kingdom’s rice exports to all EU member states.
The company expressed concern that the EU action on the Kingdom’s rice exports will impact the entire industry, according to a letter sent to the EU Commission Directorate-General for Trade.
Italian rice farmers had complained about Cambodian rice imports since at least 2014, but this is the first time a formal investigation was launched by the Commission.
The EU’s investigation was launched on March 16 in response to a request from Italy, which called for “safeguard measures” – most commonly import restrictions or tariffs – to be imposed on indica, or white rice from both Cambodia and Myanmar.
After the investigation, Commission issued its general disclosure document on November 5, requiring Cambodia to pay tax on rice exports to the EU within three years with common custom tariff duties of €175 per tonne in the first year.
The Kingdom’s rice industry argues that the EU’s safeguard clauses should be specific to the type of rice.
AMRU CEO Song Saran told The Post on Sunday that the EU’s safeguard clause targets all types of rice, while Cambodia mostly exports fragrant rice.
“The EU commission should review its safeguard clause or it will impact the entire Cambodian rice industry. It will hurt rice farmers and rice millers as well as the Kingdom’s economy."
“The safeguard clauses not only focus on indica rice or white rice but include all types of rice, which will hurt our fragrant rice exports,” Saran said.
He said while Cambodian fragrant rice targets a niche market, farmers in the EU do not produce that type of rice.
“The EU should better define [the terms and conditions of] rice exports in order to protect the profits of rice farmers in Cambodia.”
Saran said 90 per cent of Cambodian rice exports are made up of fragrant rice. And, it’s on the way to building a sustainable market for farmers.
Cambodia is granted a Generalised Scheme of Preferences (GSP), which currently grants the country’s exports tax-free entry to the European market under the Everything But Arms (EBA) scheme.
However, under Article 24 of the GSP, import tariffs can be re-applied to a product if it is determined that the product “is imported in volumes and/or at prices which cause, or threaten to cause, serious difficulties to EU producers of like or directly-competing products”.
Ngin Chhay, director of the General Directorate of Agriculture at the Ministry of Agriculture, Forestry and Fisheries, said that the Commission’s decision is unfair for the Cambodian rice industry.
“The statement from the EU regarding indica rice kind of puts pressure on Cambodia, which just stepped into [a stage of] better [economic] development."
“It is not fair for us to be based on EBA status policy and the WTO. Our rice production is based on the export of fragrant rice and does not hurt the Italian market,” he said.
The share of the EU rice market captured by Cambodian rice has grown from 15 per cent in 2013 to 25 per cent last year, said the EU.
Meanwhile, the share of the rice market controlled by European producers has fallen from 61 per cent to 39 per cent over the same period.