Cambodia Gains 10% Rice Market Share in the EU
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Rice accounts for over 70% of Cambodia’s agricultural cropped areas and about 50% of the agriculture sector output. Paddy production in Cambodia increased from 8 million tons in 2012 to 11 million tons in 2020. For Marketing Year 2021/2022, the USDA forecasted Cambodia Rice harvested area and production at 3,335 thousand hectares and 9.61 million tons, respectively. The USDA also shows that MY22/23 harvested area and production to reach 3,345 thousand hectares and 9.73 million tons based on expectations for improved weather conditions and more adoption of new technologies.
The price of Rice fluctuates often because of imbalances in supply and demand, aggravated by the movement of unprocessed Rice paddy to Thailand or Vietnam, which have better processing capacity, bigger storage, and broader distribution systems. Consistency in the quality of Rice for export is also challenging because of a lack of postharvest infrastructure and various production and processing technologies used in large and small farms.
Climate change impacts also pose a threat to Rice farming. Cambodia had its share of an increasing number of extreme climate events, such as floods and droughts, which drove farmers to consider alternate cropping systems. Where water is available, dry season irrigated Rice production is adopted as an alternative.
Production has notably increased in the past two decades, with a significant surplus exported mainly to Europe, reaching 10% of the market shares. Cambodia exported 169,766 tons of milled Rice to China in the first seven months of 2022, earning 89 million U.S. dollars in revenue, according to the Cambodia Rice Federation. China remained the largest buyer of Cambodia’s Rice, followed by the European Union, accounting for 48.3 percent of Cambodia’s Rice export.
The Federation noted that Cambodia exported 350,902 tons of milled Rice to 56 countries and regions in the first seven months of this year, up 13 percent year-on-year, generating 218 million U.S. dollars in revenue. Overall, Cambodia has great potential to become a Rice basket in Southeast Asia. However, the country’s outmoded Rice value chain needs to be updated if the twin objectives of food security and export expansion are to be achieved.
ADB’s Support for Cambodian Rice Sector
In 2013, the Government of Cambodia took on 55 million U.S. dollars combined policy-based and project loans from Asian Development Bank (ADB) and another 24 million U.S. dollars combined loans and grants from the Global Agriculture and Food Security Program and the Strategic Climate Fund for the Climate-Resilient Rice Commercialization Sector Development Project. The project was designed to transform the predominantly subsistence Rice sector into a commercially oriented industry while taking care of land and water resources.
The project financed the development of climate-resilient Rice value chain infrastructure, particularly in the three major Rice-producing provinces of Battambang, Kampong Thom, and Prey Veng. These included the rehabilitation of climate-proofing irrigation systems, construction of paddy drying and storage facilities, and construction of seed processing and storage facilities. These high-priority investments enhanced productivity, improved Rice processing, and storage within the country, and raised the quality and consistency of Rice for export.
While the project is expected to be completed by 2023, it already achieved some noteworthy milestones. The target provinces now produce about 2,493 tons of fragrant Rice seed annually. And about 18,586 hectares are now served by climate-resilient rehabilitated irrigation schemes.
In January 2022, the Global Agriculture and Food Security Program provided 3.8 million U.S. dollars in additional financing to expedite recovery from the pandemic and rebuild farmers’ resilience to economic and climate shocks. This second grant will help Cambodia’s Rice producers increase incomes and climate resilience by addressing logistics and supply chain disruptions caused by COVID-19 and will benefit about 22,000 smallholder Rice farmers.
The preparation of this article included public information such as https://www.adb.org
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