Sam Oudom
China and the European Union will be key to achieving the Cambodia Rice Federation revised down target of 800,000 tonnes of rice exports for 2022 as the critical export attempts to overcome ongoing challenges of increasing competition, taxation and transportation costs.
Speaking to Cambodia Investment Review Cambodia Rice Federation (CRF) Chairman Oknha Hun Lak explained the federation had revised down its 2022 expectations from 1 million to 800,000t of rice after a lower-than-expected 2021.
“Every year, the government and the Cambodia rice federation strategy plan had never been achieved the 800,000 or 1 million tons of rice export this has been mainly due to transportation being so expensive as well as rival factors both inside and outside the region,” Hun Lak said.
To read more about Cambodia 2022/23 economic outlook click here.
In 2021, 610,000t of rice worth around $500 million was exported. In the first 5 months of 2022 280,000t of rice exports worth around $173 million, representing a 22% increase over the same period last year.
CRF is a Cambodian government-recognized body representing over 240 members in Cambodia’s rice industry to work with government agencies and development partners. The grain is considered critical to increasing the country’s bilateral trade agenda with estimated it accounts for half the Kingdoms agricultural GDP.
China and the EU remain top buyers of Cambodian rice
According to CRF data in the first 5 months of 2022, through the federation 53 exporters over 52% was bought by China. 49% by the European Union and 17% by ASEAN.
“These increasing figures have shown us an excellent sign of rice export to the international market, especially to Chinese and EU markets. We are still likely to hope this year, the volume of our export will continue to surge and we can achieve our target,” he said.
“In addition, the EU has recently lifted the safeguard on Cambodian rice products meaning there is no tax on our rice products under EU policy and regulation,” he added.
In reference to China, Hun Lak said he expected, that the country’s already largest rice buyer, would continue to rise due to stronger bilateral connections as well as the recently ratified China-Cambodia Free Trade Agreement.
To read more about the China-Cambodia’s Free Trade Agreements click here.
“China has a large share of the Cambodian rice market due to the strong connection between the leaders of the two countries, Prime Minister of Cambodia Samdech Hun Sen and Chinese President Xi Jinping. Even at the recent meeting in 2022, the two sides further boosted Cambodia’s rice exports to China,” he explained.
Challenges remain to achieve Cambodia’s annual rice export targets
Mr. Lun Yeng, Secretary-General of the Secretariat for CRF explained the country had failed to achieve its previous 1 million tonne target due to a number of factors, including taxation when exporting to European markets.
Prior to the European Chamber of Commerce imposing sanctions in 2019 on all rice product imports to assist local products the EU bloc accounted for up to 45% of Cambodia’s total rice exports,” Lun Yeng said.
“As of January this year the European Chamber of Commerce has removed its sanctions on Cambodia’s rice export to the bloc, we expected our rice exports to Europe will return to normal,” he added.
To read our interview with Saran Song, CEO of Amru Rice Cambodia click here.
The sector will also need to address ongoing challenges such as the increased competition from neighboring countries including Thailand and Vietnam as well as record-high shipping costs.
“As the Cambodian government sets the 1 million tonne target in 2023 the federation will also be encouraging more production as well as promoting more fragrant rice with higher market demand. In addition, we will also consider more reasonable selling prices without having to sell at high prices in competing countries,” Lun Yeng said.
Sam Oudom is a Prince Foundation Young Business Journalist.
