Bangladesh has signed a deal to buy 250,000 tonnes of milled rice from Cambodia, two weeks after the two countries signed a memorandum of understanding.

The purchasing agreement was made on Monday after the officials from state-owned Green Trade Company and the Cambodia Rice Federation (CRF) flew to Bangladesh last week to negotiate in detail on the purchasing agreements between Bangladesh and Cambodia based on the government-to-government MoU, the Khmer Times reported on Wednesday.

CRF president Sok Puthyvuth said on Tuesday that Bangladesh was interested in Cambodian rice and wanted to have a relationship with Cambodia.

He said that there were tough negotiations and competition with Thailand, India and Vietnam also wooing Bangladesh to purchase rice from them.

However, Bangladesh chose Cambodia.

Bangladesh, the world’s fourth-biggest rice producer, has emerged as a major importer of the grain this year after flash floods in April hit domestic output. As a result, the country is facing dwindling stocks and high local prices.

“We will work with the CRF’s members, Green Trade and Rural Development Bank to strengthen the export soon,” Puthyvuth said.

“We want the export to take place as soon as possible,” he said. “We are not worried as Bangladesh gave us enough time,” he added.

He said that CRF will talk with its members on the amount to export to Bangladesh and would get feedback soon on their ability to export to Bangladesh.

“Prices will be based on the market price but we will continue to talk to find a win-win solution between Cambodian farmers and Bangladesh,” Puthyvuth said.

“At the moment, the price we are offering Bangladesh is competitive compared with Vietnam, Thailand and India.

“In the next five years, the price will be higher as Cambodia modernises its agriculture, particularly the rice sector,” Puthyvuth said.

On Aug 2, the Cambodian Commerce Ministry and Bangladesh signed the MoU to sell about a million tonnes of rice in the five years to 2022.

Sok Sopheak, under-secretary of state at the Ministry of Commerce, said the quality of rice and pricing were crucial for Cambodia to compete with Thailand and India who had also signed MoUs with Bangladesh.

He said costs on such aspects as logistics and terminal handling charges would be kept as low as possible.

Song Saran, CEO of AMRU Rice, welcomed the agreement with Bangladesh, saying it opened new markets for Cambodia.

“The private sector is keen to make this agreement work. We will ensure the Bangladeshis that the rice they get from us will be the best quality,” he said.

Source: http://www.bangkokpost.com/business/world/1307276/bangladesh-signs-big-rice-deal-with-cambodia