Rising exports, global renown fuel rice sector

Jan 15th at 08:02
15-01-2024 08:02:45+07:00

Rising exports, global renown fuel rice sector

After experiencing positive growth in 2023, the Cambodian rice export market is expected to continue its upward trajectory in 2024. However, factors such as weather conditions and shipping costs may cause some disruptions.

 

According to data from the Cambodia Rice Federation (CRF) – the Kingdom’s apex rice industry body –656,323 tonnes of milled rice were exported to international markets in 2023, marking a 3% increase compared to 2022.

The exports generated $466 million in revenue, a 13% rise from the previous year.

Cambodian milled rice reached 61 countries and territories through 63 exporters.

Exports of milled rice to China and its Hong Kong Autonomous Region totalled 212,756 tonnes, valued at $138 million.

In Europe, across 26 countries, exports amounted to 264,683 tonnes, equivalent to $191 million.

Seven ASEAN member countries received 93,376 tonnes, valued at $62 million.

Exports to various destinations in the Middle East, encompassing 26 countries, totalled 85,508 tonnes, worth $76 million, as per CRF data.

In addition to milled rice, Cambodia also exported 4,387,363 tonnes of paddy rice, valued at approximately $1.32 billion.

Of this, 64% was exported with certification from the relevant authorities.

Paddy rice exports saw an increase of around 26.5% and their value rose by approximately 56.69% compared to 2022.

Milled rice exports will continue to increase CRF president Chan Sokheang told The Post that 2023 was a positive year for exports, noting both revenue growth and expansion into new markets.

However, he highlighted the challenges faced, particularly the substantial export of paddy rice to neighboring markets.

Sokheang explained that the high demand in nearby markets, such as Vietnam, has led to increased rice prices.

The situation has encouraged Cambodian farmers to sell their paddy rice to traders. Meanwhile, rice millers have been hesitant to purchase paddy rice for stockpiling due to financial constraints and market unpredictability.

He added that these circumstances have adversely affected rice millers. The escalating costs of paddy rice have restricted the ability of Cambodian milled rice exporters to acquire significant quantities for storage, as prices continue to rise annually.

“Last year’s large exports of paddy rice had a severe impact on local rice millers, complicating the process of buying and storing paddy rice for milling and subsequent export,” he said.

According to the CRF, the cost of paddy rice in Cambodia surged towards the end of 2023.

The price of fragrant paddy rice averaged 1,416.67 riel ($0.35) per kilogramme, a significant increase from 1,071.67 riel ($0.26) in December 2022.

The price of OM variety rose to 1,349.13 riel ($0.33) from 957.05 riel ($0.23) and

IR variety to 1,370.83 riel ($0.34) from 980 riel ($0.24) per kg.

“Despite numerous challenges, the country still achieved positive outcomes from its milled rice exports in 2023,” he added.

Sokheang noted that in 2023, Cambodian milled rice attracted substantial interest and orders from new markets.

Timor-Leste imported approximately 4,000 tonnes, the Philippines 2,500 tonnes and Indonesia over 15,500 tonnes.

“The CRF is hopeful that in 2024, milled rice exports to international markets will continue to grow, provided there is favourable weather, effective control over rice flow and stable paddy rice prices in comparison to the international market,” he stated.

The CRF reported increases in milled rice prices in 2023.

The price of Malys Angkor cultivar, the country’s premium fragrant rice, averaged $980 per tonne, up from $790 in December 2022.

Sen Kra-Ob, also a premium fragrant variety, was priced at $840 per tonne, an increase from $760, while white rice rose to $780 from $600.

Cambodian rice’s success on the global stage despite challenges

Lay Chhun Hour, CEO of City Rice Import Export Co Ltd, a leading miller in Battambang province, highlighted the success of the country’s flagship fragrant Pkha Rumduol.

Pkha Rumduol has gained international acclaims, most recently winning first prize for the World’s Best Rice at the Rice Trader (TRT) World Rice Conference in 2022.

Chhun Hour attributed the growing popularity of Cambodian rice to its quality, taste, aroma, competitive pricing and recognition at prestigious global forums.

However, he expressed concerns for the milled rice export market in 2024, citing potential cultivation challenges due to irrigation water scarcity.

“The quality, taste and aroma of Angkor Cambodia rice have gained international recognition. Yet, I hesitate to forecast the rice export situation for 2024,” he said.

“This year, rice production is expected to be impacted by a water shortage for farming. Additionally, rising shipping costs to international markets are exerting pressure on the sector,” he explained.

Climate factors may limit paddy rice yields in 2024

On January 12, the Ministry of Water Resources and Meteorology issued an announcement regarding anticipated weather conditions.

The ministry forecasts a rise in temperatures from now until May, with average maximum temperatures reaching around 41 degree Celsius in April and early May. This represents a significant increase compared to previous years.

The dry season may experience light, unexpected showers due to a weak southwest monsoon, leading to a delayed onset of the rainy season compared to the previous year.

In light of these predictions, the ministry has requested cooperation from relevant ministries, institutions, local authorities and the public to judiciously manage water usage, with a particular focus on remote rural areas distant from sources.

In response to these concerns, various provincial and district authorities have advised farmers against cultivating in the upcoming months.

The rationale behind the advice is the anticipated drought, which could result in financial losses for farmers and insufficient water for human and animal consumption if farming continues as usual.

Milled rice export market constantly expanding

Minister of Commerce Cham Nimul addressed the inaugural ceremony of Cambodia’s first milled rice export to the United Arab Emirates (UAE), comprising 500 tonnes out of an order totalling 60,000 tonnes valued at $54 million, at Oneroad Group headquarters on January 12.

Nimul emphasised that the exports represent not just a commercial venture but also a step towards fostering cordial cooperation among Cambodia, the UAE and China, as symbolised by the Oneroad Group, a large-scale UAE-based development enterprise.

“The commerce ministry is steadfast in its commitment to actively promote and support the export of local agricultural products. The initiative is instrumental in creating more job opportunities for our farmers and producers,” he stated.

“It also aims to enhance the international competitiveness of Cambodian agricultural products … We extend a warm welcome to international partners seeking to conduct business and invest in Cambodia, with the goal of achieving mutual benefit and prosperity,” he added.

One million-tonne export goal not yet reached

In 2015, Cambodia established a goal to export one million tonnes of milled rice to international markets.

However, nearly a decade later, the ambition has yet to be realised.

During the CRF’s annual meeting, the group formulated a strategy to export one million tonnes of milled rice by 2025.

The federation reports that over the past four years, the Kingdom’s milled rice exports to international markets have slightly exceeded 600,000 tonnes.

This includes 690,829 tonnes in 2020, 617,069 tonnes in 2021, 637,004 tonnes in 2022, and 656,423 tonnes in 2023.

phnompenh post



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