China will start to build 12 rice-paddy storage facilities and 10 drying silos across Cambodia next year, in a major move to transform the Kingdom into a key food supplier for the region and beyond, according to Ministry of Commerce spokesman Pen Sovicheat.

In May 2019, Minister of Commerce Pan Sorasak and Henan Yuguang International Economic and Technical Cooperation Co Ltd (HYIETC) chairman Bi Guangmin unveiled plans for the Beijing-backed installations, which are to have a whopping one-million tonne storage capacity.

Sovicheat told The Post on December 29 that the state-owned Green Trade Co had conducted a feasibility study related to costs and locations, and submitted the relevant documents to the Henan provincial government to move ahead towards construction.

“We’ve already forwarded our investment proposals to our Chinese counterparts for the construction, after having signed an MoU [memorandum of understanding] with the provincial government of China’s Henan. We’ve studied the costs of the investments in detail and identified strategic locations,” he said.

The Post understands that HYIETC is no longer in charge of construction, but no information was immediately available regarding any new company responsible.

Sovicheat went on to say: “These facilities will be a big contribution from the Chinese government to the rice sector, and especially supportive for our farmers, allowing them to store their yields and helping prevent fluctuations in sell prices to traders.

“The installations would be able to guarantee prices for our farmers, and at the same time enable them to obtain proper documentation from the companies that own the facilities, to more readily secure loans from financial institutions.”

He shared that the 10 planned silos would be capable of drying 13,000 tonnes of paddy per day.

Cambodia Rice Federation (CRF) president Song Saran underlined that the installations would be a substantial contribution to the sustainability of the rice sector, a stepping stone for exports, and a boon for farmers who lack access to such facilities during the harvest season.

“At the same time, we will also attract more investment from Chinese firms, to set up their milling plants for export,” he said.

According to the MoU, the facilities will be located in Pursat, Battambang, Takeo, Banteay Meanchey, Siem Reap, Kampong Thom, Kampong Cham, Prey Veng, Kandal, Kampong Speu and Preah Sihanouk provinces.

The Post recently reported that China has set an export quota for milled rice at 400,000 tonnes for a period of 17 months from December 2021, after the previous contract of the same volume and duration expired.

In January-November, Cambodia globally exported 532,179 tonnes of milled rice, down by 11.46 per cent year-on-year from 601,045 tonnes, raking in $454,480,866, the Ministry of Agriculture, Forestry and Fisheries reported.

The ministry listed the buyers of Cambodian milled rice as: China (265,244 tonnes, up 12.90 per cent year-on-year), 22 EU countries (134,438 tonnes, down 28.66 per cent), seven ASEAN countries (54,350 tonnes, down 30.51 per cent) and 24 other markets (78,147 tonnes, down 21.43 per cent).