Organic rice miller CEDAC is aiming to double its exports this year as competition in the niche organic rice market heats up.
CEDAC, an acronym for Cambodian Center for Study and Development in Agriculture, shipped 540 tonnes of fragrant organic rice to international buyers in 2014, up 20 per cent compared to 2013, Sou Sarorn, the company’s organic rice export officer, said. CEDAC is one of just two organic rice exporters in Cambodia,
“Cambodia has won the world’s best rice award for three years in a row.… It has developed a good reputation that impresses buyers. So we are aiming to export 1,000 tonnes this year to fill the demand that we see in the international market,” Sarorn said.
He added that European nations, the United States and Hong Kong had historically been CEDAC’s biggest organic rice buyers, however Arab countries are looming as large potential markets.
“The price of organic rice is higher and also more stable than non-organic rice in the marketplace,” Sarorn said, calling for the Cambodian government to promote the production and the export of organic rice due to its higher margins.
He said CEDAC buys its organic rice for an average price of 1,650 riel ($0.41) per kilogram, as much as 50 per cent more than the 1,100 riel nonorganic rice farmers receive per kilo.
But CEDAC is not the only firm eyeing Cambodia’s organic rice market for rapid expansion.
Non-organic rice miller and exporter AMRU Rice in September signed a deal with eight farmer cooperatives in Preah Vihear province to purchase 2,500 tonnes of organic fragrant paddy rice for export to the EU and US markets.
The company in September promised to pay farmers of the eight cooperatives a 20 per cent premium for the organic rice.
Song Saran, CEO of AMRU Rice, told the Post yesterday the company will ship its first five containers [20 tonnes per container] of organic rice this month after the product was declared “100 per cent organic” by a Europe-based certification body in January.
“AMRU is going to export 1,500 tonnes this year and increase to 2,500 tonnes in 2016, then 4000 tonnes in 2017,” Saran said.
“The expansion will benefit thousands of farmers in Preah Vihear province where farmers are using very traditional methods,” he said.
While commanding a higher margin, organic rice exports still only a fraction of Cambodia’s overall rice exports, which totaled 380,000 tonnes of rice in 2014.
David Van, senior adviser to the Cambodia Rice Federation (CRF), said yesterday that identifying geographical locations with soil that meets such stringent requirements, coupled with the more tedious monitoring and certification processes, means large-scale organic rice production is limited.
“No doubt that ‘organic rice’ would command a higher premium in the international markets, but as the process involved to produce such product is lengthy, most farmers would balk at it,” he said, adding that CEDAC spent years educating and convincing farmers to commit to organic rice growing.
“It would take still some time before Cambodia can develop a more substantial volume of organic rice but the focus to move into high end rice varieties is certainly the ultimate objective to differentiate our rice products from our neighbouring competitors in the long run.”