Thursday, 24 May 2012
By Don Weinland
Phnom Penh Post
Farmers
transplant rice seedlings in Prek Liep commune, in Phnom Penh’s Russey
Keo district earlier this year. Photograph: Hong Menea/Phnom Penh Post
After more than a year of speculation on Cambodian rice exports to
China, a rice exporter this week said China has granted the Kingdom
permission to ship milled rice northward.
Despite a growing stack
of quasi-agreements for exports, regulatory issues have plagued the
prospects of tapping one of the region’s biggest markets for rice.
A green light for exports to China would be a boon for a sector that has heard little positive news this year.
“All the administrative problems are removed. It is really good news,” Sok Hach, president of Golden Rice (Cambodia) Co Ltd, said in an email.
He declined to say how the agreement was met or when exports would start.
The
company sent 48 tonnes of rice to China earlier this year but the
shipment was turned away at the southern China port of Shenzhen, Sok
Hach had told the Post.
The rejection was a “paperwork problem on the Chinese side” and not a problem with the quality of Cambodian rice.
Deals
with China and the Philippines were quickly appearing to be a last
resort to the European market, which bought a majority of Cambodia’s
milled rice last year.
A flood of Indian rice onto the global
market in early 2012, followed by falling prices in Thailand and
Vietnam, were a shot to Cambodian millers, with insiders citing large
decreases in forward orders for Cambodian rice.
The price of shipping rice to Europe climbed by 50 per cent between February and April, the Post reported last week.
A continued increase in oil prices presaged no end to further jumps in logistics costs.
Regulatory issues aside, Sok Hach said Cambodia still faced tough price competition.
Even
if the Kingdom’s processing and logistics costs were on par with
exporting giants such as Vietnam and Thailand, China would probably
import no more than 100,000 tonnes from Cambodia this year, he said.
A
Chinese delegation last week signed a memorandum of understanding with
Cambodia’s Power Partner Profit Group for 500,000 tonnes of milled rice,
or half of Prime Minister Hun Sen’s 2015 export goal.
The MoU was one of several such informal agreements, none of which have yet to yield true exports.
Experts agreed that China’s market had huge potential for Cambodian rice exports.
“China
is the long-term market for Cambodian rice to aim at, despite the fact
we would still need to work harder on rendering our competitiveness in
pricing,” David Van, senior manager of business development at Mekong Oryza Trading Co Ltd, said this week.
Van
gave a grim outlook for the sector last week and maintained “strong
reservations” about the government-set target for 2012, some 400,000
tonnes, given the prevailing prices on the global rice market.
To contact the reporter on this story: Don Weinland at don.weinland@phnompenhpost.com
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