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China now buys half of total milled rice exports

Content image - Phnom Penh Post
An AMRU rice processing facility in Trapaing Por village, Kouk Roka commune, Prek Pnov district, Phnom Penh. Heng Chivoan

China now buys half of total milled rice exports

China has emerged as the world’s biggest importer of Cambodian milled rice, now accounting for more than half the market share – versus just three per cent a decade ago – and is expected to further strengthen its dominance going forward, while insiders point out that traders who ship to Chinese shores pay relatively large sums for the grains.

In 2012, China bought 6,181 tonnes or about three per cent of the Kingdom’s total milled rice exports for that year, according to a statement posted on Ministry of Agriculture, Forestry and Fisheries secretary of state Hean Vanhan’s official Facebook page.

This figure continued to increase: to 28,302 tonnes (seven per cent of total milled-rice exports) in 2013, to 48,980 tonnes (13 per cent) in 2014, to 116,639 tonnes (22 per cent) in 2015, to 127,460 tonnes (24 per cent) in 2016, and to 199,857 tonnes (31 per cent) in 2017.

Although dipping slightly in 2018 to 170,154 tonnes (27 per cent), the figured recovered the following year to 248,105 tonnes (40 per cent), and grew to 289,439 tonnes (50.2 per cent) in 2020 and 309,709 tonnes (50.5 per cent) last year.

In the first half of 2022, China bought 168,280 tonnes or 51.4 per cent of Cambodia’s total milled-rice exports of 327,200 tonnes, the statement added.

On the other hand, the ministry also reported that the Kingdom exported 350,902 tonnes in the January-July period, or up by 13.24 per cent year-on-year, of which 169,766 tonnes or 48.38 per cent went to mainland China, Macau and Hong Kong, up 10.29 per cent on a yearly basis.

Song Saran, president of the Cambodia Rice Federation (CRF), the apex industry body, told The Post on September 1 that milled-rice sales to China have reached about 200,000 tonnes year-to-date, or equivalent to half of the official annual tariff-free quota allowance of 400,000 tonnes for Cambodian milled rice.

However, Cambodian exports of the commodity tend to pick up in the last four or five months of the year, he said, noting that grains sold to traders involved in export to China fetch comparatively large sums.

Saran revealed that, at a meeting with a CRF working group “about two weeks ago”, Chinese players “showed a strong will to buy more milled rice from us at high prices”.

“China has now become Cambodia’s main milled-rice export market,” he affirmed.

With great optimism for strong full-year export figures, the CRF chief stressed that the Kingdom plans to apply for a larger quota. Saran had previously cited 500,000 tonnes for 2023.

Although rice production could see some snags in the near term, Saran assured that milled rice exports to China or elsewhere were not encountering significant obstacles at the moment.

He also mentioned that exports to Europe were gaining momentum after EU trade safeguards expired early this year.

Saran was referring to safeguard measures imposed in 2019 that required Cambodian exporters to pay an import duty of €175 ($176) per tonne in the first year, €150 per tonne in 2020, and €125 per tonne in 2021.

The European Commission, the EU’s executive arm, introduced tariffs on Indica rice exports from Cambodia and Myanmar after an investigation found that the imports were allegedly causing economic damage to EU producers.

Cambodia and China first struck a deal in August 2014 for a 100,000-tonne quota, which was raised to 200,000 tonnes in 2017, to 300,000 tonnes in 2018, and to 400,000 tonnes in 2019 where it now stands.

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