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Kingdom courts rice deal with Bangladesh

A woman harvests her rice crop at a paddy field in Phnom Penh’s Dangkor district late last year.
A woman harvests her rice crop at a paddy field in Phnom Penh’s Dangkor district late last year. Heng Chivoan

Kingdom courts rice deal with Bangladesh

The Kingdom’s apex rice industry body has been meeting this week to discuss ways of nailing down a potentially massive deal with Bangladesh, which earlier this month inked a memorandum of understanding to purchase 1 million tonnes of Cambodian rice over the next five years.

Bangladesh has been shopping around to fill its silos after devastating floods earlier this year reportedly wiped out a potential 700,000 tonnes of rice under cultivation, leading to a severe food shortage. Its government has reportedly discussed import deals with Thailand, Vietnam and India, but has yet to settle on a supplier.

The Cambodia Rice Federation (CRF) convened on Tuesday for a strategy session aimed at clinching Bangladesh’s initial order of 250,000 tonnes of rice. The shipment calls for 200,000 tonnes of white rice and 50,000 tonnes of parboiled rice to be delivered in October.

CRF Vice President Hun Lak said the federation’s board and members discussed whether Cambodia was capable of filling the large order, and if it could compete on price.

“According to our members, we have sufficient rice to supply Bangladesh, but we must first see what the terms and prices are,” he said yesterday. “It’s too early to make any conclusions on our [offer] price as we’re waiting to see how prices fluctuate on the international market.”

Lak said the CRF was working with state-owned rice exporter Green Trade to prepare the offer price as well as its terms, with Green Trade to take the lead on firming up a contract with Bangladesh.

Norng Veasna, director of sales and marketing at Nikoline Rice Mill, said local millers were ready to supply rice to Bangladesh but would need support – such as reduced electricity tariffs or logistics costs – to lower their price.

He said currently the market price for Cambodian white rice was between $410 and $415 a tonne. By comparison, Thailand was offering $390 to $395 a tonne, and Vietnam was even cheaper at $385 to $390 a tonne. In addition, Cambodia’s market price on parboiled rice was $450 per tonne, about $50 higher than that of Thailand and Vietnam.

“Even though the current price of Cambodian rice is a bit higher than the rice of our neighbours we remain hopeful that negotiations can reduce this gap, allowing us to export to the Bangladeshi market,” he said.

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