The Cambodian government signed two memorandums of understanding (MoUs) with three giant Chinese state-owned institutions yesterday, creating partnerships intended to boost the production of Cambodian paddy rice and milled rice for export, according to a release from the Ministry of Economy and Finance.
The first of the two MoUs outlines a government-to-government arrangement to further open market access and facilitate growth of Cambodian rice exports to China, the Kingdom’s single largest rice importer, while the second deal provides technical assistance intended to enhance the Kingdom’s rice warehouse and storage infrastructure.
“This project is designed to resolve the challenges in the Cambodian rice sector to ensure long-term sustainability, and to address these issues systematically and comprehensively,” the statement said.
The statement did not provide financial details on the value of either of the deals, but did say that the Cambodian government will seek concessional loans from China to implement the projects.
Officials from the Ministry of Economy and Finance and the Ministry of Commerce represented Cambodia yesterday, as they signed the first deal with both the Export-Import Bank of China and CITIC Group Corporation and signed the second deal with both CITIC and a Chinese consortium called Henan Yuguang International Economic & Technical Cooperation.
According to a report released last week, Cambodia has exported 142,768 tonnes of milled rice to China so far this year, a 59 percent increase from the same period last year accounting for nearly one-third of the country’s total rice exports in 2017.
Cambodia is expected to export a total of 200,000 tonnes of rice to China by the end of the year, and hopes to increase its exports to the country by 50 percent in 2018.
Song Saran, CEO of Amru Rice Cambodia, whose company recently obtained a $5 million loan from the government to build a massive storage and drying facility in Kampong Thom province, said yesterday that these MoUs represent positive government initiatives.
Despite unmet local demand for paddy rice, Saran said that there is an annual outflow of about 4 million tonnes of paddy rice to other countries during harvest season because of the industry’s inability to process the rice locally.
“Having enough warehouse and storage infrastructure will help prevent the outflow of paddy rice, especially fragrant rice, to our neighbouring countries during harvesting seasons,” he said, adding that this will ensure food security especially in the event of a natural disaster.
“China is a potential market for a lot of Cambodian products, including many other agricultural crops,” he added. “We can build our Cambodian brand in the Chinese market via rice for now, and hopefully this will open the door for other agricultural products later.”
Mey Kalyan, senior adviser for Supreme National Economic Council (SNEC), said yesterday that the Kingdom has been in need of greater infrastructure in the rice industry for a long time.
“Implementing these projects will take some time,” he said. “But we greatly welcome the MoU agreements made today, and we hope that these projects will be implemented sooner rather than later.”
Updated Tuesday 14 November, 7:05am.