Rice exports to Mid-East a ‘priority’ for trade talks

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Cambodia earned more than $850.4 million from the overseas sale of milled and paddy rice in the first nine months of the year. Heng Chivoan

The Ministry of Commerce has put Cambodian milled-rice exports to the Middle East as a priority for ongoing talks on the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA), according to minister Pan Sorasak.

The commerce minister was speaking at the 2022 annual review meeting of the Cambodia Rice Federation (CRF), the Kingdom’s apex rice industry body.

 

A CEPA is a type of free trade agreement (FTA) generally designed for a more holistic coverage beyond just commodities, and can contain provisions for services, investments, dispute resolution, intellectual property rights, government procurement, and additional forms of specialised economic cooperation.

Cambodia and the UAE held the first round of formal talks on the deal, in Abu Dhabi from October 24-26. The ministry is now conducting a series of consultation meetings with relevant parties to gather more input before the second round.

Sorasak identified the rice sector as “consistently high-priority”, telling the meeting that the government’s invitation is always open for foreign entities to invest in the field and expand overseas markets for the Cambodian milled grain.

He added that, at the dual ASEAN summits earlier this month, Prime Minister Hun Sen asked countries to purchase more milled rice from Cambodia as well as invest in warehousing, drying silos, export-oriented processing facilities, and related infrastructure.

In the interest of enhancing the competitiveness of the Cambodian rice sector, the government offers tax breaks and similar preferential policies for rice mills and other relevant enterprises, Sorasak stressed.

In 2020-2021, the ministry also organised an in-depth and comprehensive study on production costs associated with exporting milled rice, with collaboration and financial assistance from the Cambodia-Australia Agricultural Value Chain (CAVAC) programme, he recapped.

 

He described the research as an “important basis” for the development of strategies and incentive plans to improve the sector’s competitive edge.

The minister said he expects his ministry to be able to negotiate a CAM-UAE CEPA that significantly opens up opportunities to export greater volumes of Cambodian milled rice to the seven-emirate union and other Middle Eastern countries, which he pointed out have historically been small buyers of the crop.

“Efforts to open up markets for rice and processed products made from milled rice have been active, propped up by the inclusion of these goods in … previous FTAs, such as the Cambodia-China Free Trade Agreement [CCFTA] and the Cambodia-Korea Free Trade Agreement [CKFTA] as well as the Regional Comprehensive Economic Partnership [RCEP], along with bilateral talks with countries, including those making steps towards the signing of memorandums of understanding [MoU] regarding milled-rice exports to China, East Timor, the Philippines and Bangladesh,” he said.

Ministry of Agriculture, Forestry and Fisheries secretary of state Chan Chesta, who attended the meeting, shared some encouraging statistics concerning rice harvests.

Last year, the 3.55 million hectares under rice cultivation yielded 12 million tonnes of paddy, and after deducting the roughly three-sevenths supplied for domestic consumption and export, the equivalent of 6.9 million tonnes of paddy remained in storage as of December 31, according to him.

“To boost exports, Cambodia needs to work harder, and above all, use rice varieties with potential on the export market,” Chesta said.