CAMBODIA expects to begin producing international standard rice for export to European markets in January 2009 with the construction of a new, large-capacity rice mill, an official told the Post Sunday.

Phou Puy, president of the Cambodian Rice Millers Association (CRMA), said the German-built mill was purchased by the group for US$7 million in August and is expected to go online early next year.

"It is capable of processing 300 tonnes per day, or 100,000 tonnes each year," he said.

Cambodia produced 6.7 million tonnes of unprocessed rice last year, with a capacity of between 200,000 and 300,000 tonnes of simple and polished rice per year, Phou Puy said.

He added that the association is concerned that Cambodia will be hit by shortages as consumption in Thailand and Vietnam increases.

"We are concerned about having to purchase rice at higher prices from mills in neighboring countries, given the limited resources of the CRMA," Phou Puy said.

Chan Tong Yves, a secretary of state for the Ministry of Agriculture, said last week that Cambodia had exported about 5,400 tonnes of organic rice to European markets in the first nine months of 2008.

Exports to Western countries, which must adhere to strict standards that demand that  milled rice has no impurities or chemical additives,  are expected to rise when the new plant starts operations.

"When the mill is installed, our rice will be as good as any on the international market, and we will be able to export to more European countries," Phou Puy said.

Poor quality has limited Cambodia's rice exports, with much of the harvest suitable only for Asia and Africa.

Mao Thora, a secretary of state for the Ministry of Commerce, told reporters last week that Cambodia would export some 3,000 tonnes of rice to Senegal early next year.

Trade delegation

The deal followed a Cambodian trade visit to Senegal by rice millers and farmers from six Cambodian provinces last month. Senegal placed initial orders for 3,000 tonnes of Cambodian rice.

But Phou Puy said Senegal was not the target market for Cambodia's rice exports.

"Exporting rice to Senegal is not our main priority.

The big target is the European Union," he said.

The trade trip was organised by the Ministry of Commerce and the UN Development Program.

Yang Saing Koma, president of the Cambodian Center for Study and Development in Agriculture (CEDAC), expressed concern that over-emphasising the export market could lead to shortages at home.

"It is good to export a better standard of rice to international markets, but we have to consider local demand," he said.

"We need to think about food security and price stability, both of which could be negatively affected by increased exports."