China plans to increase its rice import quota from Cambodia next year as the country braces for possible cutbacks by the European Union (EU) to limit milled rice imports from least developed countries (LDC).
Commerce Minister Pan Sorasak said on Tuesday that his Chinese counterpart Gao Hucheng agreed at a bilateral trade meeting to increase China’s import of milled rice from Cambodia and to review the import quotas every year, the Khmer Times reported on Wednesday.
“We have asked China to increase its import quota of milled rice from Cambodia, and now they [China] agreed to what we requested,” said Sorasak.
“China will import another 200,000 metric tonnes of milled rice in 2017 on top of their current rice imports from Cambodia. Both sides agreed to review the outcomes of this bilateral trade cooperation every year,” he added.
The Chinese commerce minister is currently on an official visit to Cambodia to discuss roads, railways, airport construction, agriculture and other projects with senior government officials.
Cambodia’s request to China comes just after last month’s visit by delegations from the Brussels-based European Commission’s directorate-general for agriculture and rural development and the directorate-general for trade. Both delegations advised Cambodia’s rice industry to seek other markets and not just concentrate its exports to Europe, as the country moves from a low-income country in its LDC status to a lower-middle income nation.
An EU source who did not want to be named told the Khmer Times that the visiting delegations from Brussels hinted the EU could limit rice imports from LDCs in the “Everything but Arms” (EBA) trade concessions to about 300,000 to 350,000 tonnes a year.
Both Cambodia and Myanmar are the only LDCs recognised in the EBA trade concessions and rice exports from both countries have unfettered access to EU markets.
“This means Cambodia would need to share these new EU quotas with Myanmar in the very near future,” said the source.
Last year, the total amount of Cambodian milled rice exported reached some 538,396 tonnes, according to the Cambodian Rice Federation, with 43% exported to the EU.
Sorasak, however, was optimistic that the EU would not cut back on its import of milled rice from Cambodia.
“Cambodia still has preferential access to the EU’s rice markets. They [EU] just want to make sure that we export good-quality rice,” said Sorasak.
Hun Lak, Cambodia Rice Federation’s vice president, told the Khmer Times that both China and Cambodia had already agreed on the import quota of 100,000 tonnes.
Hun Lak added that it was an opportune moment now, with China agreeing to import more rice from the country, for Cambodia to make its milled rice competitive in the international market.
“Though the quality of Cambodian rice is good, its price is $60 higher per metric tonne compared to a neighbouring country,” he added. Though referring to Vietnam, Hun Lak did not name it outright.
“We have to find a way to lower production costs to keep our rice prices low,” he said.