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Government refutes claims over price of Bangladesh rice deal

A rice farmer gathers rice grains for sale after harvest season in Battambang province.
A rice farmer gathers rice grains for sale after harvest season in Battambang province. Heng Chivoan

Government refutes claims over price of Bangladesh rice deal

Cambodian officials and members from the private sector have refuted international media reports that claim the price for rice exports to Bangladesh will be set at $453 a tonne as part of a government-to-government deal that hopes to see 250,000 tonnes of white rice exported to Bangladesh by October.

A report released yesterday by Reuters cited two Bangladeshi officials from the Food Ministry as having set the price at $453 per tonne, adding that the purchase agreement was still waiting Cambodian government approval. Cambodia has been negotiating with Bangladesh on prices for a potentially massive deal after inking a memorandum of understanding earlier this month that could see 1 million tonnes of rice sent to the South Asian country over the next five years.

Hun Lak, vice president of the Cambodia Rice Federation (CRF), said he was unaware of that price being suggested by state-owned rice exporter Green Trade, the firm that is in charge of handling negotiations. He added that a price is expected to be finalised in mid-September and needs to cover the costs associated with insurance and freight.

“So far we have only agreed on the amount of white rice that will be exported, but we haven’t agreed on the price yet,” he said. “We will base our price on the international market.”

Nevertheless, Lak acknowledged that the reported $453 per tonne would not necessarily be affordable or profitable for the sector as exporters were still calculating the logistical costs of the international shipments.

Kim Savuth, chairman of Khmer Foods Group, said that the private sector was anxiously waiting to hear from the government about the estimated costs of logistics.

“I am waiting to see what the governments deal will look like and what the rice price will be set at and the timeframe for delivery,” he said. “We in the private sector are waiting to see what the free on board [FOB] costs will be and what the government will offer us.”

He said currently the market price for Cambodian white rice was between $410 and $415 a tonne and that a figure of $453 per tonne would not necessarily cover the additional expenses exporters would face without government subsidies.

Soeng Sophary, spokesperson for the Ministry of Commerce, said that while the framework agreement for the deal is in place, further negotiations on prices need to be conducted before Bangladesh signs a final purchase agreement.

“The price will definitely be in accordance with the international market price, which is fair to both Bangladesh and Cambodia,” she said. “But as of now the timeframe [for a purchase agreement] is not fixed and it depends on the demand from Bangladeshi buyers.”

Bangladesh is seeking to import as much as 1.5 million tonnes of rice this year and has so far imported 200,000 tonnes of white rice at $430 a tonne and 50,000 tonnes of parboiled rice at $470 a tonne from Vietnam at rates much higher than initial tenders.

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