Cambodia, Albania negotiate rice deal

Written by HOR HAB AND GEORGE MCLEOD

Tuesday, 17 February 2009

CAMBODIA'S efforts to diversify rice exports have taken a small step forward with a planned deal that would see 5,000 tonnes of rice sold every month to Albania, starting with a 300-tonne shipment. "Albania has contacted us to buy 300 tonnes of 10 percent-broken rice from Cambodia as a trial purchase ... Cambodian rice has a lot of potential in the market," said Outh Renne, secretary general of Small and Medium Industry of Cambodia. "We sent them a sample of 25-percent, 10-percent, and five-percent broken rice, and they are interested in the 10-percent broken rice," he said. Negotiations are continuing with the Albanians having offered US$475 per tonne and Cambodia asking $490, down from its previous offer of $500, Outh Renne said. The deal could also see 4,000 tonnes of corn sold per month to Albania. Cambodian rice has a lot of potential in the market. The move to tap the Albanian market follows government efforts to diversify Cambodia's rice exports and increase production of milled rice. Late last year, Cambodia announced it was in talks with Senegal to sell 10,000 tonnes of rice per month. Discussions are ongoing, and authorities say they are arranging transport and waiting for the UN Development Program to reconvene the talks. "Negotiations will resume with Senegal after a two-month delay," said Mao Thora. "Our main obstacle is the price and transportation." Trade officials say they are also in talks with Congo-Brazzaville to sell low-grade rice. Tes Ethda, president of the national Rice Millers Association of Cambodia, said that the country is making headway tapping markets for low and medium-grade rice. "The biggest market for rice and corn is Asia and Africa, and we have more potential to tap that market, but we still have some problems with transportation costs," he added. Cambodia exports about two million tonnes of rice per year, but yields remain low at only 2.6 tonnes per hectare compared with 3.5 tonnes in Thailand and about six tonnes in China. Poor irrigation, a lack of fertilisers and inadequate dissemination of market information are among the challenges the sector faces. Government spending on agriculture is a low three percent of agricultural GDP, versus 10 percent in China and Thailand, say World Bank figures.