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Cambodia – Shipping and production costs pose challenge for rice sector in early 2022: CRF
The Covid-19 pandemic has posed a challenge to exporting agro-produce especially rice, given the escalating logistic and production costs in the first months of this year.
According to Lun Yeng, Secretary General of Cambodia Rice Federation (CRF), the main challenge for Cambodian milled rice is the shortage of shipping containers from the EU and the US. This, he explained, is the reason for the increase in shipping costs.
Shipping costs have increased because shipping companies are taking advantage of the situation to increase profit.
“The profit of shipping industry in 2022 has increased by at least eight to ten folds compared to 2020. Production costs have also doubled or even tripled yet farmers are left with no choice but to reduce costs on pesticides and fertilisers for cultivation; this leads to a decrease in production of rice due to higher production costs,” he explained.
To promote the export of rice in the international market, the CRF has set a one-million tonne target by the end of 2023. He, however, said that whether or not the target is able to be met still depends on the Covid-19 situation in Cambodia.
“The surge in cases in the last two years have made it tough to anticipate anything so there are still uncertainties despite setting targets,” Yeng said. “This target can only be achieved if the Cambodian rice export increases to 800,000 tonnes this year and so the 2023 target will not be impossible to achieve.”
A recent Cambodia Rice Federation report shows that for the first months of 2022, Cambodia exported 53,036 tonnes of milled rice worth $ 35.72 million to 34 destinations including the United States.
Cambodia also exported 6,277 (5.52 percent) tonnes of rice to three of its Asean member countries, with the remaining 5.52 percent to other countries.
There has been an increase of 54.75% in rice export compared to January 2021.
In January this year, a cross-border paddy rice trade took place with Cambodia’s neighbouring countries at an estimated $60.61 million or 275,511 tonnes of rice.
The Chinese market (including Mainland China, Hong Kong and Macau) dominates the Cambodian rice market, with 309,709 tonnes of rice worth $185.69 million exported there. This accounts for 50 percent of the total rice exported in the international markets.
The report also shows Cambodia as exporting 165,513 tonnes of rice worth $119.39 million the US and to 24 EU countries while seven Asean-member countries bought 63,165 tonnes of rice worth $42.40 million.
The cross-border trade of paddy rice with neighbouring countries mainly Vietnam saw an export of 3.53 million tonnes costing $845.95 million while the overall export of milled rice by Cambodia last year, as shown by CRF, amounted to 352, 7418 tonnes worth over $845 million. The CRF further reports that Cambodia exported a worldwide total of 617,069 tonnes of milled rice worth$418 million.
Source: https://www.khmertimeskh.com/501019941/shipping-and-production-costs-pose-challenge-for-rice-sector-in-early-2022-crf/