Issues with Kingdom’s rice exports

The rice fields of Cambodia.

By Rann Reuy
Tuesday, 15 November 2011
Phnom Penh Post

Cambodian rice trader TTY Corporation has said the Kingdom cannot meet a new 200,000-tonne export quota for shipping high-quality rice to China.

State-owned Sinograin’s order for three varieties of milled fragrant rice was a deviation from an agreement struck with TTY in August, TTY deputy director-general Heng Sarath said on Sunday.

The original 200,000-tonne deal – about 20 per cent of the Cambodian government’s 2015 rice export goal – was for low-quality milled rice, Heng Sarath said. The Kingdom simply could not fill the new order, he said.

“In Cambodia, [some varieties of fragrant rice] are still not grown widely. We need to export tens of thousands of tonnes of this rice, so meeting the quota remains unlikely,” said Heng Sarath.

Deals for milled rice with China have increased rapidly during the past 12 months. No Cambodian rice traders, however, have reported a start in exports. Other traders, as well as the World Bank, have expressed concern over Cambodia’s capacity to export large volumes of milled rice by 2015. Strict Chinese regulations have also added to uncertainty, experts have said.

Soma Group, a Cambodian rice exporter, recently signed a memorandum of understanding with China’s Yunnan Overseas Investment Company for 20,000 tonnes of rice per year. Although the Chinese company has yet to request specific qualities of rice, Kith Chankrisna, Soma’s assistant chief executive, said yesterday China will most likely require high-quality rice.

Whether Soma could fill such a deal is uncertain, Kith Chankrisna said, adding that there was no set time to begin exports.

Lim Bunheng, president of Loran Import-Export Company and owner of Cambodia’s biggest rice mill, on Sunday said the demand for fragrant rice in the Kingdom is high. With much of the country’s unmilled rice exported to Vietnam and Thailand, Cambodian traders fail to cash in on the value-adding process.

A World Bank report dated July 12 said logistic bottle necks and a lack of milling capacity could hold Cambodia’s rice exports to a fourth of the 2015 goal, or at about 250,000 tonnes.

An export protocol signed by Cambodia and China in October of last year states that the Kingdom must pass Chinese pest regulations before exportation can begin.

Chinese inspectors have recently visited Cambodia, Ngin Chhay, rice department director at the Ministry of Agriculture, Forestry and Fisheries, said Sunday. Results from the inspection – which would focus on four specific pests endemic in Cambodian rice fields – have yet to be seen, according to Ngin Chhay.

Officials at Sinograin and the Yunnan Overseas Investment Company could not be reached for comment.