Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom gets back on track with overseas sugar exports

Kingdom gets back on track with overseas sugar exports

Kingdom gets back on track with overseas sugar exports

Shipment of 10,000 tonnes is on its way to the UK – the first in four decades

Cambodia shipped its first export of raw sugar to an overseas market in four decades on Friday last week, with the 10,000 tonne cargo destined for the United Kingdom.

Koh Kong Sugar Industry, which opened its factory for operation in January, said that the shipment left last Friday from Laem Chabang port in Thailand’s Chonbori province.

“We made our first shipment last week since the plant officially opened for operation in January,” Korn Posayanond, research and business development manager at Khon Kaen Sugar Industry Public Co Ltd – the factory’s 50 percent shareholder – told the Post on Wednesday.

He declined to disclose how much the shipment was worth, saying it was confidential.

The Post estimates 10,000 tonnes of raw sugar would yield about US$3.31 million, based on Wednesday’s prices on the Bloomberg agriculture index, which said one pound of raw sugar was valued at $0.15.

Korn Posayanond said crushing operations for next year’s exports would begin in November, and that the factory has already planted and expected to harvest between 200,000 and 250,000 tonnes of sugarcane for this year’s harvest. But he said there are concerns as to whether this level is sustainable.

“We expect to increase our export volume to between 20,000 tonnes and 25,000 tonnes of raw sugar to Europe’s markets next year,” he said.

“However, our greatest concern is the shortage of sugar-cane due to the low yield resulting from land condition and poor farming techniques,” he said, and added that in Thailand 1 hectare of sugar cane yields up to 60 tonnnes, whereas in Cambodia the yield is only 42 tonnes.

The company is seeking to contract more farmers to grow sugarcane exclusively for the factory in order to address the possible shortfall, he said.

“We are calling on farmers to grow sugarcane to supply our factory. We will supply them sugarcane seeds and fertiliser free of charge, but they have to sell their sugarcane yield to us,” he said.

He said the factory would give them a fair price – a tonne of sugarcane for 900 baht, or US$27.50.

Bunlert Pramkerson, the governor of Koh Kong province, said Wednesday that the province is cooperating with the factory to encourage farmers to take up the offer.

“Our officials are informing farmers about the demand for sugarcane from the factory and encouraging them to grow it because it is a sustainable source of income for them,” he said.

Koh Kong Sugar Industry is a $60 million joint venture by three partners – Thai investor Khon Kaen Sugar Industry Public Ltd holds 50 percent, Taiwanese investor Vewong Corporation holds 30 percent, and Cambodian investor Ly Yong Phat holds 20 percent.

The three companies have received certain privileges under the investment-promotion measures of the Cambodian government, such as 90-year concessions for sugar cane plantation areas of some 20,000 hectares in Koh Kong, as well as tax incentives, according to a previous interview with Khon Kaen Sugar Industry’s CEO Chamroon Chinthammit.

The plant has the capacity to crush 700,000 tonnes of cane per year, with an expected raw sugar output of about 70,000 tonnes of sugar per year.

MOST VIEWED

  • Protests planned in New York as Hun Sen to attend the UN

    Prime Minister Hun Sen will speak at the United Nations General Assembly in New York this week. But US-based supporters of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP) plan to throw eggs at his car as part of a series of protests to coincide

  • CPP: ‘Behave or Sokha suffers’

    The ruling Cambodian People’s Party (CPP) spokesman warned Kem Monovithya on Thursday that her attempt to damage “national reputation and prestige” would lead to her father, Kem Sokha, receiving even harsher punishment. Sok Eysan issued the warning as Monovithya, who is the court dissolved

  • News Analysis: Defiance can last for how long?

    The Cambodian government has so far stood strong in the face of mounting international pressure over its treatment of critics, but analysts, diplomats and ruling party officials now wonder how long the defiance can last. The European Union has led the firestorm of criticism, threatening

  • ‘Freedom fighters’ or ‘foreign puppets?’

    Former Cambodia National Rescue Party (CNRP) official Meach Sovannara was joined by supporters at a rally in California on Saturday, where a US lawmaker hailed members of the outlawed opposition as “great freedom fighters”. However, a Cambodian government spokesman said such a phrase belonged to