RICE SECTOR PROFILE

Value Chain Unit Trade Promotion Department Ministry of Commerce, Cambodia October 2010

This Sector Profile was prepared by the members of the Value Chain Information Unit within the Trade Promotion Department of the Ministry of Commerce. Additional inputs were provided by a research team set up by H.E. Cham Prasith, Senior Minister, Minister of Commerce. Ms. Bun Chamnan, Trade Promotion Department Mr. Chea Vorak, Trade Promotion Department Mr. Sean Sophea, Trade Promotion Department Mr. Tim Raya, Trade Promotion Department Ms. Ith Sokum, Multilateral Trade Department Mr. Chhean Potry, Bilateral Trade Department Ms. Nirng Vachna, Trade Statistics and Information Department Mr. Hang Vanny, Trade Preferences Systems Department Mr. Kann Viseth, Multilateral Trade Department Mr. Mom Chantra, Trade Preferences Systems Department Mr. Chhin Sophal, Trade Preferences Systems Department

The teams were supported by two advisers to the Trade Promotion Department: Dr. Michael Freudenberg, International Trade Centre (ITC) Dr. Ralf Mueller, Gesellschaft fuer technische Zusammenarbeit (GTZ), Centre for International Migration and Development (CIM)

The teams carried out desk research and field visits to Battambang, Kampong Cham and Prey Veng Provinces in March and May 2010 to better understand the domestic business environment that affects actors in the rice value chain. The Ministry of Commerce would like to thank the United National Development Programme (UNDP), the International Trade Centre (ITC), and the Gesellschaft fuer Technische Zusammenarbeit (GTZ), Centre for International Migration and Development (CIM) for financial support.

Contents
Rice sector profile
World market ............................................................................................................................................................................................... 3 Cambodias exports ................................................................................................................................................................................... 7 Domestic supply capacity ........................................................................................................................................................................ 9 Constraints ................................................................................................................................................................................................. 15 Strategies and activities ........................................................................................................................................................................ 17 Recommendations .................................................................................................................................................................................. 18 Outlook and investment opportunities........................................................................................................................................... 20 References ................................................................................................................................................................................................. 23

List of Tables
Table 1. Main paddy rice producers in the world, 2008 .............................................................................................................. 4 Table 2. World market for rice products, 2008................................................................................................................................ 5 Table 3. Top exporters of rice (HS 1006), 2008................................................................................................................................ 5 Table 4. Top rice exporters in the world (world market share in %, 2008) ........................................................................... 5 Table 5. Top importers of rice (HS 1006), 2008 ............................................................................................................................... 6 Table 6. Top rice importers in the world, (world market share in %, 2008).......................................................................... 6 Table 7. Cambodias rice exports: Cambodian versus mirror statistics (USD 1,000).......................................................... 8 Table 8. Top rice producing provinces in Cambodia (2008-09) .............................................................................................. 10 Table 9. Rice yields in top producing provinces (2008-2009).................................................................................................. 11 Table 10. Yields among the main paddy rice producers in the world, 2008...................................................................... 12 Table 11. The largest rice mills in Cambodia ................................................................................................................................. 14 Table 12. Options for rice shipments overseas............................................................................................................................. 14 Table 13. Attractive markets for milled rice (HS 100630), 2008 ............................................................................................. 21 Table 14. Attractive markets for brown rice (HS 100620)......................................................................................................... 22 Table 15. Attractive markets for broken rice (HS 100640)........................................................................................................ 22

List of Figures
Figure 1. Rice production in the world, 1961-2008 (million tons) ........................................................................................... 3 Figure 2. Nominal price quote (USD/ton), for rice (5% broken), fob Bangkok (January 1980 July 2010) .............. 7 Figure 3. Rice production in Cambodia, 1961-2008 ................................................................................................................... 10 Figure 4. Distribution of rice production in Cambodia .............................................................................................................. 11 Figure 5. Cambodian paddy supply and rice exports, estimated for 2008-09 .................................................................. 12

Rice sector profile

List of Annex
Annex Table 1. Main paddy rice producers in the world .......................................................................................................... 25 Annex Table 2. Top exporters of rice (HS 1006), 2008 ............................................................................................................... 25 Annex Table 3. Top importers of rice (HS 1006), 2008 .............................................................................................................. 26 Annex Table 4. Cambodias exports of rice, 2008 (mirror data) ............................................................................................. 26 Annex Table 5. Top exporters of paddy rice (HS 100610) in 2008 ......................................................................................... 26 Annex Table 6. Top exporters of brown rice (HS 100620), 2008 ............................................................................................ 27 Annex Table 7. Top exporters of milled rice (HS 100630) in 2008 ......................................................................................... 27 Annex Table 8. Top exporters of broken rice (HS 100640) in 2008 ....................................................................................... 27 Annex Table 9. Cambodias exports of paddy rice (HS 100610) by partner....................................................................... 28 Annex Table 10. Cambodias exports of brown rice (HS 100620) by partner.................................................................... 28 Annex Table 11. Cambodias exports of milled rice (HS 100630) by partner .................................................................... 28 Annex Table 12. Cambodias exports of broken rice (HS 100640) ......................................................................................... 28 Annex Table 13. Top importers of paddy rice (HS 100610), 2008 ......................................................................................... 29 Annex Table 14. Top importers of brown rice (HS 100620) in 2008 ..................................................................................... 29 Annex Table 15. Top importers of milled rice (HS 100630) ...................................................................................................... 29 Annex Table 16. Top importers of broken rice (HS 100640) .................................................................................................... 30 Annex Table 17. Attractive markets for brown rice (HS 100620) ........................................................................................... 30 Annex Table 18. Attractive markets for milled rice (HS 100630) ........................................................................................... 31 Annex Table 19. Attractive markets for broken rice (HS 100640) .......................................................................................... 31 Annex Table 20. Top rice-producing provinces in Cambodia (2008-09) .............................................................................. 32

Rice sector profile

Rice sector profile

Why a sector profile on rice? Rice is by far Cambodias most important agricultural product and the sector employs around 2.9 million people. Rice is the major staple food and is cultivated by the large majority of small farmers. It is crucial for human development in terms of food security and poverty reduction, especially for subsistence farmers. Estimates of rice exports including informal exports suggest that rice is by far the most important agricultural export product in Cambodia. Although most exports involve paddy rice, milled rice is increasingly considered to have important potential for future exports.

World market
Main producers World paddy rice production grew by a factor of three in the past 50 years, from about 200 million tons in 1961 to 680 million tons in 2009, and was forecast to reach a record 710 million tons in 2010 (Figure 1). Paddy rice production dropped by about 1 percent between 2008 and 2009, mainly due to erratic monsoon rains and the resurgence of El Nio conditions in Asia, but was expected to grow by 4 percent in 2010, again mainly due to changes in Asian countries. India in particular was expected to drive this upturn in the region, followed by the Philippines, Sri Lanka and Thailand (FAO, Rice Market Monitor, April 2010). The main producer countries in the world are in Asia. By far the largest producers and consumers are China (almost 200 million tons in 2008) and India (some 150 million tons). Other important producers are Indonesia, Bangladesh, Vietnam, Myanmar and Thailand (Table 1). With 7.2 million tons of paddy in 2008, Cambodia is the 14th largest producer in the world. Cambodia is the fastest growing among the large rice producers in the world, and is now the 14th largest producer. However, it has to be mentioned that information about Cambodias rice production is difficult to obtain and is sometimes crudely estimated. Figure 1. Rice production in the world, 1961-2008 (million tons)
800 700 600 500 400 300 200 100 0

Rest of world Indonesia India China

1961

1970

1980

1990

2000

2008

Source: FAO, FAOSTAT.

Rice sector profile

Table 1. Main paddy rice producers in the world, 2008

Level 2008 Production (million tons) 193.4 148.3 60.3 46.9 38.7 30.5 30.5 7.2 685.0 Yield (tons/ha) 6.6 3.4 4.9 4.0 5.2 3.7 3.0 2.7 4.3 Dynamism 2000-2008 (Index 2000=100) Production 102 116 116 125 119 143 118 178 114 Yield 105 118 111 115 123 110 114 130 111 Area harvested 97 98 104 109 97 130 104 137 103

1. China 2. India 3. Indonesia 4. Bangladesh 5. Vietnam 6. Myanmar 7. Thailand () 14. Cambodia World

Source: FAO. For more detailed information, see Annex Table 1.

Statistics on internationally traded products

Only a small part of world production of rice is traded internationally. World trade for rice (HS 1006) amounted to about 32 million tons in 2008, or USD 22 billion (Table 2). This is less than 5 percent of total world production, partly because the main producing countries are also the main consumers and the world rice market is fairly protected. There exist thousands of different rice varieties around the world, but a major distinction in international trade statistics is made according to the different processing steps. The Harmonized System (HS), which is an international trade nomenclature covering more than 5,000 product items at the most detailed level (6 digits), distinguishes four items of rice: Paddy rice (HS 100610), which is also called rice in the husk or rough rice, is rice as it comes from the field and from which the inedible, protective hull has not yet been removed. Brown rice (HS 100620) or husked rice is the least processed form of rice. It has the outer hull removed, but still retains the bran layers that give it a characteristic tan colour and nut-like flavour. Milled rice (HS 100630), which can be semi-milled or wholly-milled rice, is also called white rice. All or part of the bran and germ is removed from the rough rice. Broken rice (HS 100640) is low-cost rice with broken kernels. A major quality differential, besides different varieties, is the percentage of broken kernels: The more broken kernels, the cheaper the rice. Milled rice (HS 100630) is by far the major internationally traded rice product, accounting for roughly three-quarters of total world rice trade (Table 2). In 2008, world imports of milled rice amounted to 22.5 million tons or more than USD 17 billion. Between 2004 and 2008, imports of milled rice grew on average by 5 percent per year in quantity, and by 27 percent per year in value. However, this upward trend cannot be extrapolated, as there were strong fluctuations of prices during the commodity price speculation and world food crisis.

Rice sector profile

Table 2. World market for rice products, 2008

Products (and HS code) Value imported (USD million) 22,097 905 1,769 17,554 1,866 Quantity imported (million tons) 31.37 1.98 2.15 22.51 4.72 Unit value (USD/ton) Growth in value 2004-2008 (%/year) 23 14 18 27 23 Growth in uantity 2004-2008 (%/year) 6 -3 0 5 11

1006: Rice 100610: Paddy rice 100620: Brown rice 100630: Milled rice 100640: Broken rice Source: ITCs Trade Map.

704 456 822 780 395

Main exporters

The world export supply is concentrated on a few countries. Thailand is by far the worlds largest rice exporter: its 10.2 million tons correspond to 29 percent of world exports in value in 2008. It is followed by Vietnam (14 percent), India (13 percent), Pakistan (12 percent), and the United States (10 percent). These five countries together account for more than three-quarters of world exports (Table 3). Table 3. Top exporters of rice (HS 1006), 2008
Exporters Value (USD million) Share in world exports ( %) 100.00 28.92 13.71 13.46 11.55 10.48 0.02 Unit value (USD/ton) Growth in value 2004-2008 (%/year) 23 23 26 24 30 15 4 Growth in quantity 2004-2008 (%/year) 6 2 23 2 7 3 14

World 1. Thailand 2. Vietnam 3. India 4. Pakistan 5. United States (..) 52. Cambodia*

21,117 6,108 2,896 2,843 2,440 2,214 4

655 598 610 804 800 476 639

Source: ITCs Trade Map. Trade for countries marked with * is estimated through mirror statistics. For more detailed information, see Annex Table 2.

Most world rice export consists of milled rice for which the above mentioned nations dominate. With regard to the less traded rice products, the United States are the largest exporter for paddy rice and brown rice, while Thailand is the worlds number one exporter for broken rice (Table 4). Table 4. Top rice exporters in the world (world market share in %), 2008
Paddy rice (100610) (%) 1. United States (84.7) 2. China (4.5) 3. France (1.5) 4. Paraguay (1.1) 5. Italy (1.0) 6. Brazil (0.9) 7. Greece (0.9) 8. India (0.8) 9. Spain (0.8) 10. Argentina (0.6) 27. Cambodia* (0.05) Brown rice (100620) (%) 1. United States (20.6) 2. Thailand (18.0) 3. Guyana (10.3) 4. Italy (9.6) 5. Uruguay (9.0) 6. China (7.0) 7. Spain (5.0) 8. Argentina (4.%) 9. Belgium (1.9) 10. Suriname* (1.7) 41. Cambodia* (0.04) Milled rice (100630) (%) 1. Thailand (29.7) 2. India (15.7) 3. Vietnam (15.6) 4. Pakistan (12.9) 5. United States (6.7) 6. Italy (3.7) 7. U. Arab Emirates (2.9) 8. China (2.0) 9. Uruguay (1.8) 10. Brazil (1.2) 52. Cambodia* (0.02) Broken rice (100640) (%) 1. Thailand (47.8) 2. Pakistan (9.7) 3. Vietnam (7.0) 4. Brazil (6.2) 5. Belgium (5.1) 6. United States (4.2) 7. Italy (3.5) 8. Uruguay (2.6) 9. Netherlands (2.3) 10. Spain (1.4) 42. Cambodia* (0.03)

Source: ITCs Trade Map. For detailed information, see Annex Table 5, Annex Table 6, Annex Table 7, and Annex Table 8.

Rice sector profile

Main importers

There is much less concentration on the import side. The Philippines is the largest rice importer in the world (almost USD 2 billion in 2008, corresponding to a world market share of 8.9 percent), followed by countries in the Middle East (United Arab Emirates (UAE), Saudi Arabia, Iran) and Malaysia (Table 5). As a region, the European Union (EU), with its 27 member countries, is the largest importer in the world (especially the United Kingdom and France). Table 5. Top importers of rice (HS 1006), 2008
Importers Value (USD million) 22,097 3,124 1,957 1,517 1,153 1,141 812 Share in Unit value Growth Growth in Tariff faced Tariff faced (USD/ton) in value by world quantity by imports (%) 2004-2008, 2004-2008 Cambodia Thailand (%) (%/year) (%/year) (%) 100.0 a 24 17 .. .. 14.1 959 .. .. 4.9 24.5 8.9 802 52 19 50 48 6.9 1,172 49 20 0 0 5.2 988 17 -2 0 0 5.2 931 34 5 4 4 3.7 a 49 116 40 40

World EU-27 1. Philippines 2. U. Arab Emirates 3. Saudi Arabia* 4. Iran* 5. Malaysia

Source: FAO, ITCs Trade Map and Market Access Map. Trade for countries marked with * is estimated through mirror statistics. For more detailed information, see Annex Table 3. a. Quantity data for Malaysia was excluded because it is wrong and affects the world total and unit values.

The main importers of milled rice are roughly the same as for total rice, reflecting the importance of milled rice in total rice. However, for the three smaller rice products, the main destination markets differ strongly depending on the product (Table 6). For paddy rice, the main importers are Latin American countries (Mexico, Honduras, Nicaragua, Costa Rica) who arrange processing. For brown rice, the main consumer markets are in Europe, especially in the United Kingdom, Belgium, Netherlands, France, Germany and Italy. Low-cost broken rice is imported mostly by African countries, such as Senegal, Ghana, Cote dlvoire, Guinea and Kenya.

Table 6. Top rice importers in the world (world market share in %), 2008
Paddy rice (100610) (%) 1. Mexico (34.6) 2. Honduras* (5.6) 3. Nicaragua* (5.3) 4. Costa Rica (5.2) 5. Vietnam (4.4) 6. Panama (4.3) 7. Guatemala (4.0) 8. Italy (3.9) 9. El Salvador (3.4) 10. Venezuela (2.5) Brown rice (100620) (%) 1. United Kingdom (15.0) 2. Belgium (9.3) 3. Korea (9.2) 4. Netherlands (8.1) 5. France (7.0) 6. Germany (6.5) 7. Italy (5.1) 8. Malaysia (4.2) 9. Portugal (3.4) 10. Spain (3.0) Milled rice (100630) (%) 1. Philippines (11.1) 2. U. Arab Emirates (8.5) 3. Saudi Arabia* (6.5) 4. Iran* (6.5) 5. Malaysia (3.7) 6. United States (3.0) 7. Benin* (2.9) 8. Bangladesh* (2.9) 9. Cuba* (2.7) 10. South Africa (2.5) Broken rice (100640) (%) 1. Senegal (30.5) 2. Ghana (7.7) 3. Cte d'Ivoire (7.3) 4. Belgium (4.6) 5. Malaysia (4.4) 6. France (3.6) 7. United Kingdom (3.6) 8. Guinea (3.6) 9. Japan (3.4) 10. Kenya (2.2)

Source: ITCs Trade Map. * Countries with mirror statistics. For more detailed information, see Annex Table 13, Annex Table 14, Annex Table 15 and Annex Table 16.

Rice sector profile

Prices

World market prices for rice have increased over the past decade with a dramatic increase and decrease during and after the commodity price speculation and the world food crisis. The price for Thai White Rice 5 percent broken an international reference has increased from a low level of around US 200 /ton in the early 2000s to about USD 450 /ton in April 2010 (Figure 2). With the world food crisis, rice prices tripled in 2008 but have returned since then almost to the levels before the crisis. Prices for some varieties can be much higher, e.g. Thai Jasmine Rice or Indian Basmati (see e.g. www.thairiceexporters.or.th/price.htm). Figure 2. Nominal price quote (USD/ton), for rice (5% broken), fob Bangkok (January 1980 July 2010)
1200

1000

800

600

400

200

Source: IMF Primary Commodity Prices (www.imf.org/external/np/res/commod/index.asp).

Cambodias exports
Issues with Cambodian trade statistics It is difficult to assess the volume and value of Cambodias rice exports because of a lack of reliable official data. Cambodia reported trade data to the United Nations Statistics Department (Comtrade database) until 2004, and then again in 2008, while so-called mirror statistics those reported by Cambodias trade partners to the United Nations Statistics Division are available until 2008 (and even until 2009, but without Vietnamese imports) (Table 7). The two sources can differ substantially and thus suggest different interpretations. The remainder of this sector profile uses mainly mirror statistics. A second problem is that official statistics do not take into account informal exports and thus seriously underestimate Cambodias paddy rice exports. Both Cambodian statistics and mirror data suggest that Cambodia exports mainly milled rice and very little paddy rice. However, industry observers agree on the contrary that a substantial amount of Cambodian rice exports concerns paddy rice that is informally exported to Thailand and Vietnam.

80 81 82 83 84 85 86 87 88 89 19 90 91 92 93 94 95 96 97 98 9 20 9 00 01 02 03 04 05 06 07 08 0 20 9 10

19

Rice sector profile

Table 7. Cambodias rice exports: Cambodian versus mirror statistics (USD 1,000)
Product 2001 2002 4,464 0 3,843 621 0 4,565 0 2,661 1,905 0 2003 643 0 0 643 0 2,610 0 968 1,642 0 2004 1,924 0 35 1,889 0 3,165 0 0 2,914 251 2005 .. .. .. .. .. 2,301 0 178 1,987 136 2006 .. .. .. .. .. 3,183 11 686 2,397 86 2007 .. .. .. .. .. 1,976 241 751 832 152 2008 2009 1006 Rice 2,388 100610 Paddy rice 0 Cambodian 100620 Brown rice 0 statistics 100630 Milled rice 2,388 100640 Broken rice 0 1006 Rice 1,172 100610 Paddy rice 0 Mirror 100620 Brown rice 676 statistics 100630 Milled rice 496 100640 Broken rice 0 Source: ITCs Trade Map. 2,427 .. 478 .. 0 .. 1,937 .. 12 .. 4,104 12,928 466 0 391 1,238 2,914 10,455 332 1,236

Cambodias performance relative to its main competitors

Cambodia is still a small player in the world rice market, and is ranked in general between rank 27 and rank 50 for the various products (Table 4). However, this low ranking is partly a statistical shortcoming (for paddy) and partly subject to change (wholly and milled rice). Cambodia may well be one of the biggest paddy rice exporters in the world, even though mirror statistics suggest that Cambodian formal paddy rice exports amount to less than USD 500,000. The only Cambodian rice exports of relevance are paddy rice and milled rice. For both products it is difficult to make precise statements regarding the size of exports due to the statistical limitations described above. For paddy rice, it is estimated that about 1.6 million tons of paddy are exported informally to Vietnam and Thailand. With regard to varieties, Cambodian paddy exports to Vietnam consist mainly of International Rice Research Institute (IRRI) rice, while exports to Thailand are traditionally aromatic varieties, although in recent years increasing quantities of non-aromatic paddy have been exported, too. For milled rice, the main market has recently become the European Union (EU) with total exports of more than USD 2 million (mirror data). The main markets within the European Union are France, Italy and Germany. The strong upward trend of Cambodian wholly and semi-milled rice export, which tripled in 2009, can be attributed to the tariff-free market access granted to Cambodia by the EU under the Everything-but-Arms Agreement. For other, more traditional, markets, reliable mirror data is not available, but considerable quantities of wholly or semimilled rice are exported to Vietnam and Thailand.

Cambodias current markets

Cambodias market access conditions

Some major rice consuming countries in Asia have fairly protected markets, e.g. Japan and South Korea, and rice is considered a sensitive product under the ASEAN Free Trade Agreement (AFTA) by some ASEAN countries (the Philippines, Indonesia and Thailand) and tariffs remain high. State trading enterprises are also prevalent in some markets (e.g. Indonesia). However, Cambodia enjoys duty-free access in a number of major importing countries, especially in the European Union (EU). Since September 2009, the EU has granted duty-free and quota-free access for rice to all least developed countries (LDCs). With previously very high Most Favoured Nation rates of EUR 145 /ton (for milled rice), Cambodia enjoys a significant advantage and is also the only LDC besides Myanmar with significant rice exports. These favourable market access conditions in Europe could bring about significant gains in Cambodias market share, if bottlenecks in infrastructure (especially milling facilities) are reduced. The strong increase of Cambodian rice exports to the EU over recent months demonstrates the potential for future exports to this market.

Rice sector profile

Many importing countries require non-tariff measures, particularly sanitary and phyto-sanitary (SPS) measures for rice. Even in ASEAN, trade in rice is covered by more protective AFTA conditions. For instance, China has stringent SPS measures in place, which require regular inspections by the Ministry of Agriculture, Forestry and Fisheries. The complexity of these procedures means that Cambodian exports of rice to China have effectively been suspended. In addition, many countries (e.g. India) provide price support and subsidies to domestic producers.

Domestic supply capacity

Main actors The main actors in Cambodias rice value chain are farmers, collectors and processors. Farmers: Rice is a staple food and is cultivated all over the country. Rice farmers tend to be small subsistence producers, though there are also large farms. It is estimated that there are 2.25 million rice farmers in Cambodia (Slayton, 2009), and that the rice sector employs in total 2.94 million people (DAI, 2008). Collectors: The paddy from the farms is sold either directly to Cambodian mills, or through a network of collectors, middlemen and traders to domestic mills or mills in Vietnam and Thailand. Collectors may be agents for millers or sell to larger merchants. Rice mills: Estimates concerning the number of rice mills vary substantially, from 23,000 (MIME statistics) to 47,000 (SEILA database), although there seem to be not more than 1,000 commercial mills (Slayton, 2009). Mills tend to be small by international standards, and there are only a handful of mills that can mill more than 10 tons of paddy rice per hour. Over the past two years several larger rice mills have considerably upgraded their milling equipments, in terms of both quality of milled rice and output per hour.

Seasonality

Cambodia experiences distinct wet and dry seasons, and the majority of rice is cultivated during the wet season (May-November), in particular under rain-fed lowland conditions. According to USDA (2010), about 80 percent of Cambodian rice production (86 percent of total rice area) occurs in the summer monsoon wet season, while the remainder is produced in the predominantly irrigated dry winter period. A myriad of varieties are used, of which some have a good international reputation. Crop scientists estimate that over 3,000 varieties of rice are cultivated in Cambodia (USDA, 2010). This myriad of varieties (Slayton 2009) causes problems for overseas export since it is common to mix different varieties both at the farming and collecting/ trading level (many farmers plant more than one variety so as to minimize the risk of losses due to drought or flooding). Some varieties have a high international reputation for quality and provide good export opportunities. Cambodian paddy rice production has increased rapidly in the past decade, due to an extension of the harvest area and improvements in the yield. According to MAFF, Cambodia produced 7.2 million tons of paddy rice in 2008, up from 4.0 million tons in 2000 (Figure 3). This increase is due to both an increase in the cultivated land (from 2.3 to 2.6 million ha) and an improvement in yields (from 2.1 to 2.7 tons/ha). Cambodia was a major rice supplier to international markets in the 1960s, but it took 20 years to return to pre-crisis production levels and another 10 to surpass them. Since then production has continued to grow dramatically.

Rice varieties

Cultivated area, production, yield

Rice sector profile

Figure 3. Rice production in Cambodia, 1961-2008

8 7 6 5 4 3 2 1 0 1961 1965 1970 1975 1980 1985 1990 1995 2000 2005 2008

Million tons (paddy basis)

Source: FAOSTAT.

The increase in Cambodias rice yield is due to several factors, including an expansion of irrigation infrastructure or land, increased use of high yielding varieties, and an intensification of the crop cycle through double-cropping during the main wet season (USDA, 2010). The Cambodian Agricultural Research and Development Institute (CARDI) estimated that roughly 40 percent of all rice acreage was under improved, high yielding varieties in 2008, up from about 32 percent in 2003 (USDA, 2010). The rise in Cambodias rice production translates into a sizeable surplus that can be exported, though the order of magnitude is not clear. While MAFF estimates that it has an exportable surplus during 2008-09 of almost 3.2 million tons (up from about 650,000 tons in 2004), other estimates are substantially lower, possibly only half of this level (e.g. Slayton 2009). Production in provinces Rice is grown in all provinces in Cambodia, though there are two main corridors producing the majority of rice: in the east along the Vietnamese border (Prey Veng, Takeo, Kampong Cham, and Svay Rieng) and in the west along the Thai border (Battambang and Banteay Meanchey) (Table 8, Figure 4). The corridors produce different varieties: the eastern provinces specialise in high-yield Imidazolinone Resistant (IR) varieties; the western provinces produce aromatic rice. Table 8. Top rice producing provinces in Cambodia (2008-09)
Province 1. Prey Veng 2. Takeo 3. Kampong Cham 4. Battambang 5. Banteay Meanchey () Total 7,175,473 2,613,363 2.75 Production (ton) 994,580 875,884 700,662 672,765 549,553 Harvested area (ha) 322,993 255,607 219,278 249,425 216,191 Yield (ton/ha) 3.08 3.43 3.20 2.70 2.54

Source: MAFF. For more detailed information, see Annex Table 20.

10

Rice sector profile

Source: MAFF, Department of Planning and Statistics.

Figure 4. Distribution of rice production in Cambodia

Source: USDA (2010).

Provincial and international yield differences

There are difficulties in comparing yields across provinces or countries, as rice exists in many varieties that can be produced using different techniques (e.g. rain-fed versus irrigated). For example, the Cambodian average of 2.7 tons/ha hides important differences between seasons: 2.5 tons/ha during the rainy season 2008 compared to 4.0 tons/ha during the dry season 2008/09 (Table 9). Likewise, yields among provinces (during the rainy season) range from as high as 3 tons/ha in Kampong Cham and Takeo to 2 tons/ha in Siem Reap. Furthermore, Eastern Cambodia and Vietnam, where low-priced IR Varieties dominate, tend to have higher average yields than Western Cambodia and Thailand (which focus more on high-priced aromatic varieties).

Table 9. Rice yields in top producing provinces (2008-2009)

Province Prey Veng Takeo Kampong Cham Battambang Banteay Meanchey Kampong Thom Svay Rieng Siem Reap Kandal Total Yield during rainy season 2008 (tons/ha) 2.8 3.0 3.0 2.7 2.5 2.2 2.2 2.0 2.9 2.5 Yield during Yield during dry season 2008-09 total year 2008-09 (tons/ha) (tons/ha) 4.2 3.1 4.5 3.4 3.8 3.2 4.4 2.7 3.5 2.5 3.7 2.4 4.0 2.4 3.8 2.1 4.2 3.6 4.0 2.7 Production during total year 2008-09 (1,000 tons) 995 876 701 673 550 436 418 413 364 7,175

Source: MAFF. For more details, see Annex Table 20.

Although yields have increased, they remain low; in fact, they are among the lowest in South East Asia. The Cambodian average of 2.7 tons/ha in 2008 is below levels in Thailand (3.0 tons/ha) and Vietnam (5.2 tons/ha), and even more so when compared to China (6.6 tons/ha), the largest rice producer in the world (Table 10). This is due to a number of factors, including a comparatively weak irrigation system and the low use of fertilizers even in infertile native soils in some regions. Concerning irrigation, according to MOWRAM, 24 percent of rice cultivation is irrigated, but effective irrigation coverage is even lower than. The National Medium-term Priority Framework (NMTPF) Cambodia 2011-2015 (MAFF and

Rice sector profile

11

FAO) reports that only about 1 percent [of the rice area] is fully irrigated in all seasons. In general, crop land that benefits from controlled irrigation represents less 10 percent of the total, as compared with 33.4 percent in Vietnam and 28.4 percent in Thailand. Access to irrigation systems varies geographically. In some north-eastern provinces there are virtually no irrigated areas. Concerning fertilizers, FAO estimates that only about 30 percent of Cambodias total area receives even minimal application, which makes Cambodias rate of fertilizer use for rice the lowest in Southeast Asia. Furthermore, most fertilizers available in the local market are of low quality.

Table 10. Yields among the main paddy rice producers in the world, 2008
Production (million tons) 193.4 148.3 60.3 46.9 38.7 7.2 0.0 685.0 Level of yield (tons/ha) 6.6 3.4 4.9 4.0 5.2 2.7 4.3 Change of yield (2000=100) 105 118 111 115 123 130 111

1. China 2. India 3. Indonesia 4. Bangladesh 5. Vietnam () 14. Cambodia () World

Source: FAO. For more detailed information, see Annex Table 1.

Collecting and trading

It is estimated that only about 40 percent of farmers have a marketable surplus available for collectors and traders, as most rice farmers in Cambodia are small (around 1 ha and less) and harvest losses are significant (around 18 percent). The remainder is milled at custom mills at the village level and consumed by the farmers, or used for seed retention and animal feed (DAI 2008). This surplus is estimated to be about 2.7 million tons, and is marketed through a complex system of collectors and traders. Paddy traders tend to be considerably larger than collectors, often having large warehouses. Paddy traders buy from both farmers and collectors and typically sell to mills. Sales of paddy can be both within one province, inter-provincial or, informally, to Vietnam and Thailand. Especially near the borders of Vietnam and Thailand, collectors and traders have close relationships with traders or millers from these countries, with obvious consequences for the flow of paddy. It is estimated that about 1.6 million tons of paddy are exported to Vietnam and Thailand, more than half the marketable surplus that is not consumed by producers or at village level (Figure 5). Figure 5. Cambodian paddy supply and rice exports, estimated for 2008-09
Paddy rice 7,174,000 tons (100%) Post-harvest loss: 1,256,000 tons (18%) Animal feed: 215,000 tons (3%) Surplus for human consumption: 5,346,000 tons (75%)

Seed retention: 359,000 tons(5%)

Farmers self-comsumption (custom mills): 2,673,000 tons(37%) Paddy export to Vietnam: 1,042,000 tons (15%)

Marketed surplus: 2,673,000 tons (37%)

Paddy export to Thailand: 561,000 tons (8%)

Paddy milled in domestic mills: 1,069,000 tons (15%) = 674,000 tons milled rice

Sales on domestic market: 654,000 tons milled rice

Export: 20,000 tons milled rice

Source: DAI (2008) updated by Value Chain Information Unit.

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Rice sector profile

Milling capacity

Cambodia does not have the capacity to mill its annual paddy production. Most rice mills have a very small production capacity, despite increasing investments in rice mills. This is why a considerable part of Cambodian paddy is exported (informally) to Vietnam and Thailand. Reasons for the limited milling capacity include: Very few rice mills in Cambodia are able to process more than 2.5 tons per hour, which restricts the countrys overall ability to cope with the farmers increasing paddy supply (Slayton 2009); Rice millers are typically short of capital and face high credit costs, which restricts their ability to provide sufficient paddy at the main harvest time (November/December) to operate their mills for longer than a few months; Antiquated milling technologies of most Cambodian rice mills cause high processing costs and output losses which prevent these millers from paying paddy prices to farmers comparable to those offered by Thai and Vietnamese traders and millers. Recovery rates (about 63 percent of paddy) of Cambodian rice mills are among the lowest in Southeast Asia, and additional output losses are caused through high percentages of broken rice. Furthermore, high energy costs impose a further burden on milling costs, with most rice mills being fuelled with diesel.

In the past, almost all milled rice produced by Cambodian mills was marketed locally. Even larger mills had been unable to supply international markets for a number of reasons such as antiquated technology (which produces high quantities of broken rice at milling costs that are not competitive internationally), and high domestic transportation and exportation costs. Angkor Kasekam, which produces high-quality Neang Malis rice under a system of contract farming, was for years the only rice mill in Cambodia that constantly supplied international markets (especially France), albeit in very limited quantities. However, in recent years some Cambodian rice millers, a few of them with international partners, have made considerable efforts either to improve existing rice mills or to establish new rice mills. The most prominent examples are Green Trade, Baitang Kampuchea and Golden Rice (Table 11). Some of these millers apply the latest technology from Japan or Taiwan and focus on overseas markets, especially Europe, where Cambodia has enjoyed tariff-free market access under the Everything-but-Arms Agreement (EBA) since September 2009. First shipments have been made over recent months to countries such as France, Poland and Lithuania and much larger exports are expected in the years to come.

Rice sector profile

13

Table 11. The largest rice mills in Cambodia

Rice mill (Province) Milling capacity (tons/hour of paddy) 15 tons 13 tons Paddy processed in 2009 (tons) .. .. Technology / Equipment Export experience

Golden Rice (Kampong Speu) Ying& Yang Rice Head Quarterz Co. Ltd (Sihanoukville) Vin Cheang Rice Mill Co.Ltd. (Kampong Cham) Angkor Kasekam Roongroeung Co., Ltd. (AKR) (Kandal) Green Trade (Phnom Penh)

.. ..

.. ..

12 tons 10 tons

500-600 tons 20,000 tons

Dryer, polisher, color sorter, broken sorter. Utilizes color sorters, and burns the rice husk using co-generation technology. Six mills (one of which with Satake technology), comprehensive modernization in 2009. Old equipment, now comprehensive modernization. Dryer, stone sorter, |color sorter, polisher, broken sorter. Latest technology from Japan (Satake) and Taiwan, from cleaner to packager.

No, but plans to export soon. Exports especially to France.

10 tons

..

Exports to various markets; joint-venture with Vietnamese for large-scale exports. Exports to France, Portugal, Italy, Germany, Switzerland (via agent).

QC Rice Co. Ltd (Kampong Cham)

10 tons

2,000 tons

Baitang Kampuchea Plc. (Battambang)

30 tons (planned for 2011)

In 2009 not yet operating

Exports to Germany, Australia, France and Italy.

Shipments

There are three options for rice shipments abroad. While exports via Sihanoukville remain costly,, exports via Vietnam seem increasingly attractive, in particular because of the new deep sea port in Cai Mep (Table 12). Table 12. Options for rice shipments overseas
1. Sihanoukville For whom? Shortest distance for rice grown in central Cambodia, but long domestic (land) transport for rice grown near Thai or Vietnamese border. Infrastructure and cost High (but improving) shipment costs, but this avoids cross-border procedures/costs in Thailand or Vietnam. 2. Via Vietnam (Saigon/Cai Mep) Especially an option for rice grown in the Eastern provinces of Cambodia. 3. Via Thailand (Laem Chabang or Bangkok) Only an option for rice grown in the western provinces near the Thai border.

Transport by river from Phnom Penh or Neak Leung to Mekong Delta.

Requires road transport (a railway connection is currently not available but reconstruction is planned in coming years). Political tensions caused temporary border closures, but any long-term problems with this export gateway are very unlikely.

Comment

This option appears to be increasingly attractive, with the new deep sea port in Cai Mep.

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Rice sector profile

Constraints
Constraints Knowledge / Management / Entrepreneurship Farmers Farmers have very limited cultivation skills (maintenance, crop rotation, diseases) and post-harvesting techniques (high post-harvest losses up to 20 percent). Limited knowledge about inputs (seeds, fertilizers, pesticides) and how to use them (often no product description in Khmer). Material inputs Most inputs available in the domestic market are of low quality (inappropriate seeds, fertilizers, pesticides). High input costs as most inputs are imported. Degradation of seed quality, when farmers retain some of their harvest as seed. Land Small plot size limits farms mechanization (e.g. planters, harvesters). Limited irrigation allows only one to two harvests per year. Unclear land ownership (only about 10 percent of farmers have land titles) discourages long-term investments, e.g. irrigation. Technology Most farmers use traditional tools for cultivation and harvesting, often on a subsistence level. Most rice mills are still small scale and apply outdated technology, despite recent investments in modern milling equipment and expanded milling capacities. All milling machinery needs to be imported. Finance Unfavourable credit conditions (high interest rates, limited loan scale, complicated and long credit procedures, strict collateral requirements in the absence of land titles for most farmers) limits especially small farmers access to finance. High credit costs and absence of credit on the basis of crops as collateral (warehouse receipt inventory finance system) restrict traders ability to buy paddy from farmers. Lack of affordable credit leads to under-investment in the expansion and modernization of milling capacity and limits the capacity to buy and store paddy rice (and run the rice mill all year). Small paddy collectors often do not keep the varieties separate, but aggregate them into a mixture. Collectors/traders Processors Lack of experience in management of modern rice mills. Limited knowledge about selection and application of appropriate processing technologies. Limited experience in marketing and exporting.

Difficult to find high quality paddy rice (often rice is badly dried and different varieties are mixed). Competition with foreign buyers (from Thailand and Vietnam) to buy paddy rice.

Rice sector profile

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Constraints Infrastructure

Farmers High energy costs restrict possibilities for mechanization and irrigation. Inadequate agricultural crop extension programs lead to limited on-farm technology transfer. Limited funding for scientific agricultural research leads to dependency on international donors for crop research.

Collectors/traders High formal and informal transportation costs (with the result that collectors/traders reduce paddy prices offered to farmers).

Processors High energy costs lead to high milling costs (few mills use husk gasifiers to save energy). High transportation cost (including informal road fees) and long documentation procedures are significant burden for overseas rice export.

Technical standards, quality

No product standards existing in Cambodia. Too many varieties: Many farmers plant more than one variety to minimize the risk of losses due to drought or flooding.

Collectors/traders offer no or little price incentives for better quality (moisture content). Collectors fail to keep different paddy varieties separate.

Due to the lack of standards and grading system, rice millers often fail to provide their customers with consistent rice quality. Inconsistent quality between different mills prevents them from cooperating to meet large-scale orders that cannot be served by individual mills. Weak quality management (high broken content, mix of varieties, insect contamination, etc.) prevents even many of the larger rice mills from international market access. Non-tariff trade barriers (such as SPS requirements) in many importing countries erect significant barriers to Cambodian rice.

Marketing and distribution channels

Price information often comes from buyers that have an interest in low prices (government-initiated information services such as CAMIS and EMCS are little known).

High informal export costs. Long process of exporting.

Very limited international marketing experience (no Cambodian export network due to long-term dependency on Vietnam and Thailand as export gates for Cambodian rice). Cambodian rice lacks a well-known brand.

Source: Adapted from DTIS (2007), Trade SWAp Pillar II Rice Task Team (2008), DAI (2008), Slayton (2009), USDA (2010), and own research and interviews with stakeholders.

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Rice sector profile

Strategies and activities

The Royal Government of Cambodia The Cambodian Government intends to expand the countrys production and export capacity and to make it a major rice export nation. According to Prime Minister Hun Sen, Cambodia wants to double rough rice production by 2015 to approximately 15.0 million tons (9.45 million milled basis) and export 8.0 million (5.0 million tons milled rice) (USDA, 2010). Irrigation: The Government has made a concerted effort to acquire international loans and grants to expand the reach of the national irrigation infrastructure, and this effort has borne fruit in the rice sector. USDA (2010) reports that the Ministry of Water Resources and Meteorology (MOWRAM) brought approximately 650,000 ha of rice area under irrigation between 1996 and 2007, and has plans to irrigate an additional 800,000 ha over the next decade. Finance: The Government has provided capital to rice millers. The credit of USD 10.5 million provided by Rural Development Bank (RDB) to the NCRMA is intended to enable rice millers to purchase more paddy and invest in modernization of milling technology. This improved significantly Cambodian millers ability to conduct milled rice export; however, given the magnitude of the millers capital constraints, more funds need to be mobilized in the years to come. Formal exports Current policy: Following the food crisis in 2008, exports of quantities larger than 100 tons without special government permission were granted solely to Green Trade and the NCRMA. This prompted Angkor Rice to protest and gain similar authority. According to Green Trade, a requirement for a permit for exports above the equivalent of 1,200 tons of paddy was introduced in 2009, but it could allow other exporters to use its export authorization (presumably for a fee). Angkor Rice reported that it also had a blanket approval, while other exporters indicated that they were not concerned about the difficulty in obtaining this permission. (Slayton, 2009). In 2010, the Prime Minister announced that exports by smaller rice mills would be eased further in order to cope with growing domestic paddy surplus and the international demand for Cambodian rice. Prime Minister Hun Sen presented Cambodias new rice export strategy on 17 August 2010. Development partner s Various technical assistance programmes are already in place. Most constraints have been addressed by those programmes, but the need for technical assistance is still high. Several important programmes addressing constraints such as cultivation skills, irrigation, access to quality inputs, milling quality, market information and access are addressed by organizations such as AFD (Agence Franaise de Dveloppement), AusAID (Australian Agency for International Development), EU (European Union), FAO (Food and Agriculture Organization of the United Nations), IFC (International Finance Corporation), and JICA (Japan International Cooperation Agency). Other programmes with impact on rice have started or are about to start soon, including those by CAVAC (Cambodia Agricultural Value Chain Program) and CAASP (Cambodia Agriculture and Agribusiness Support Programme). The System of Rice Intensification (SRI) is a set of innovative rice cultivation methods. Introduced in Cambodia by CEDAC (Cambodian Center for Study and Development in Agriculture) in 2000, the programme has grown from 28 rice farmers from 18 villages in 2000 to over 60,000 farmers from about 2,600 villages today.

Rice sector profile

17

Recommendations
The following table summarizes the main action points for the Government, development partners and the private sector to address specific constraints.
Constraints Cross-cutting issues Possible solution Overcome fragmentation in the rice support system. Illustrative interventions Develop a joint and comprehensive strategy that involves all stakeholders and coordinates technical assistance. National partners for implementation Royal Government, private sector (incl. NGOs) Royal Government, research, private sector

Strengthen the Establish a permanent Rice Export Working Group Governments (or Rice Export Committee) that awareness of - provides a forum to listen to constraints and needs constraints and of the private sector; challenges of private sector in rice sector. - supervises progress in Cambodias rice exports; proposes actions and policy reform to further strengthen the rice sector.

Knowledge / Management / Entrepreneurship

Improve training and advice services to farmers.

Start a gradual but strong and coordinated effort to establish an effective farmer extension service network. Start with pilot provinces and extend the system gradually nationwide. Promote Business Development Services to professionalize rice farming (commercial farms) and rice milling for international market.

MAFF, private sector, Agro-NGOs (e.g. CEDAC) MIME, MAFF, private sector

Involve more farmers in contract farming systems. Material inputs Promote better access to appropriate agricultural inputs (fertilizer, seeds, etc.) for improved cultivation.

Provide clear legal framework (law and/or sub-decree on contract farming) and supporting training programs for contract farming (start with pilot provinces). Enforce effective control on imports of agro-inputs (and stop inflow of illegal low quality products such as high-poisoning fertilizers and pesticides or fake products). Promote the importation of quality inputs (seed strains, fertilizers, insecticides, pesticides, etc.) through tax incentives. Ensure that sufficient product information is available for agro-input (in Khmer language).

MAFF, private sector

MEF, MoC, MAFF

MoC, MEF

MAFF

Promote and control input suppliers at provincial and MAFF district level: provide training to input suppliers (on quality inputs and its application) and withdraw business licenses of those who sell illegal, fake or diluted products. Land Increase security of land ownership. Distribute more land titles in order to enable farmers to make long-term investments in their plots. Ministry of Land Management, Urban Planning and Construction MOWRAM

Promote more small-scale irrigation schemes and ensure that farmers can manage maintenance.

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Rice sector profile

Constraints Technology

Possible solution Strengthen mechanization of rice farming. Attract lead investment (domestic / international) in rice milling.

Illustrative interventions Support business development services that advise armers on long-term investment (see also Entrepreneurship, Management, Knowledge). Provide incentives on investments in rice milling, such as nil import tax on rice milling technology or subsidized credit for high rice milling investment or modernization (see also Finance). Enforce existing laws and draft and pass new laws in order to introduce appropriate new financial products to finance agro-business (e.g. warehouse receipt finance system, leasing). Support micro-finance through improved capitalization (subsidized credit to micro-finance institutions).

National partners for implementation MAFF

MEF, CDC

Finance

Improve financial infrastructure for rice-related business.

MEF

MEF, National Bank of Cambodia MoC

Infrastructure

Improve port infrastructure.

Continue modernization and expansion of Sihanoukville port. Strengthen capacities of Phnom Penh port and negotiate favourable conditions for exports of milled rice via Vietnam (Ho Chi Min City / Cai Mep).

Ease export procedures (reduce time and expenditures). Reduce energy costs. Improve domestic transportation. Technical standards, quality Provide internationally recognized SPS certificates. Supply consistent quality in line with international standards. Marketing / Distribution channels Provide access to new markets. Provide market information.

Establish One Window Office at the national level for rice export procedures (with branch offices in key rice export provinces such as Kampong Cham and Battambang). Promote renewable energy technologies (husk-gasification). Rehabilitate railway system to Sihanoukville. Close road and river checkpoints. Establish infrastructure (laboratories) and capacity (train staff) to issue internationally recognized SPS certificates. Establish a nationwide system of grading in line with international standards: provide training to traders and millers, especially through national and provincial rice miller associations, in order to follow and implement these standards. Negotiate for favorable market access of Cambodian rice in key rice markets (e.g. Middle East, Philippines). Establish a Cambodian Rice Exporter Association that is open to any potential rice exporting company and that provides its members with services, such as information on international rice markets (potential markets, quality requirements), information on export-relevant processing technologies, and assistance in export procedures. Conduct market study trips for Cambodian rice millers and exporters to attractive markets (e.g. Middle East, Africa, Europe, Russian Federation).

MoC, MEF, MAFF

MIME

MAFF

MIME (Cambodia Standard Institute), private sector MoC MoC

MoC

Create reputation for Cambodian rice.

Develop trademarks and geographical indications (GI) that could strengthen Cambodias competitiveness for a number of rice products and, as a result, be endowed with a unique Cambodian competitive advantage.

MoC, MAFF

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19

Outlook and investment opportunities

Outlook The long-term outlook for the world market is favourable. According to USDAs Rice Market Outlook, import demand by some of the major consuming countries is expected to increase over the next decade. This is especially true of Bangladesh and Indonesia, where demand is increasing due to population growth and there is little area for expansion of production. Cambodia could find successful export opportunities in niche markets. Specialty rice, such as Basmati or Thai Jasmine is becoming more and more popular in Western countries. Market access conditions in these markets are good, often with zero tariffs (e.g. European Union and Russia), although most offer no preferential access for Cambodian rice compared to rice from other major exporters. As Cambodia already produces high-value varieties, there could be significant potential in such markets. For Cambodia, there is room for an increase in overall production. However, whether Cambodia will be able to export substantial amounts of milled rice depends on adequate milling facilities, reduced domestic transportation and exportation costs, and improved access to finance by millers so that they can buy sufficient paddy to operate a mill all year. More modern milling facilities would allow more direct exports to overseas markets and more value added in Cambodia. More milling facilities could lower dependence on Thai or Vietnamese millers, and reduce the market power of Thai and Vietnamese buyers of Cambodian rice. This would also benefit rice farmers who suffer from the fact that their paddy is transported to neighbouring countries for milling, which reduces their paddy prices. Cambodian farm gate prices are estimated to be 35-40 percent lower than those in Vietnam and Thailand (Slayton, 2009). Prospects for better milling facilities are uncertain. According to consultants in the field, it will probably be many years until there is enough capacity to process Cambodias paddy surplus. As long as this situation prevails, any government measures that tried to enforce the official ban on paddy exports (to support local millers) would necessarily harm rice farmers, as the ban depresses paddy prices. However, measures could be undertaken to attract more (foreign) investments in large-scale rice mills for direct exports to the world market, which would be able to compete against mills in Thailand and Vietnam. Investment opportunities The Cambodian rice sector offers opportunities for both domestic and international investors. Production increase There is a potential to further increase production, as plenty of arable land is available and there remains room for yield improvements. Cambodian agricultural development officials claim that the rice area could be expanded to 3.5 million ha, an increase of roughly 1.2 million ha from current levels (USDA, 2010). An even larger increase could come from improvements in yields through improved irrigation systems, the use of high-yielding varieties, more and better fertilizers, and improvements in farming practices. As a result, Cambodia could harvest two or even three times per year on the same land areas (Im, 2008). Contract farming There are significant opportunities for agri-business investment in integrated contract farming and milling operations. While returns to agri-business are highly variable depending on year or season, consistent profits can be made through vertical integration, according to DAI, ADI and IDE (2008). Rice milling investments for export Even though Cambodia has a constantly growing paddy supply and favourable access to various international markets (including. tariff-free access to EU and Russia) comparatively few exports of milled rice have been achieved. This provides excellent opportunities for international rice milling investors to fill this gap.

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Rice sector profile

Niche markets There is significant potential in the production and export of organic and/or fair trade rice. Several development agencies (e.g. GTZ, CEDAC, Oxfam Quebec) have promoted the production of organic rice. Organic rice can strengthen food security as farmers are enabled to grow their crop without chemical fertilizer (purchasing fertilizer imposes a significant financial burden on small-scale farmers with limited financial means). In international markets, organic rice provides premium prices for producers. Another specialized rice product not yet supplied by Cambodia is fair trade rice. Potential future markets for Cambodia to diversify its rice exports In order to identify promising markets to diversify Cambodias exports, the International Trade Centre (ITC) developed a Market Attractiveness Index that takes into account three dimensions: the size of importing markets; the dynamism of imports over the past five years; and the market access conditions that apply to an exporter country and its main competitors. Applied to Cambodia, the following markets are considered most attractive. For milled rice, the most attractive markets are in the Middle East (United Arab Emirates, Iran, Saudi Arabia) followed by the Philippines, the largest importer in the world, the United States and Malaysia (Table 13). Some of these countries apply 0 percent tariff for milled rice from Cambodia (e.g. United Arab Emirates, Saudi Arabia, United States, South Africa). In contrast, others apply much higher tariffs, such as the Philippines (50 percent) and Malaysia (40 percent). Though Cambodian exporters are disadvantaged compared to domestic (e.g. Filipino) rice producers, they enjoy the same market access conditions as their main international competitors in those markets (e.g. Thailand, Vietnam). Cambodia has a substantial tariff advantage in the Russian market: 0 percent for Cambodia compared to 21 percent on average for Thailand, Vietnam and China. In 2008 Cambodia exported to only two countries among the 20 most attractive markets in the world: Malaysia and Singapore. Table 13. Attractive markets for milled rice (HS 100630), 2008
Market Share of market in world imports Market growth 2004-2008 (% per year) 40 33 21 65 20 48 48 29 22 52 Tariff applied Cambodias to Cambodia tariff (%) advantage (+) or disadvantage (-) (%) 0 0 4 0 0 0 50 0 0 1 40 0 10 0 5 0 0 0 0 0 Main competitors in this market

1. U. Arab Emirates 2. Iran* 3. Saudi Arabia* 4. Philippines 5. United States 6. Malaysia 7. Benin 8. Bangladesh 9. South Africa 10. Oman

9.0 6.6 6.8 11.6 3.2 3.9 3.0 3.0 2.7 2.1

India, Pakistan, Thailand UAE, Pakistan, Uruguay India, Pakistan, USA Vietnam, Thailand, USA Thailand, India, China Thailand, Vietnam, Pakistan Thailand, Brazil, Pakistan India, Thailand, Pakistan Thailand, India, China Pakistan, Thailand, UAE

Source: ITCs Trade Map and Market Access Map. Trade for countries marked with * is estimated through mirror statistics. For more detailed information, see Annex Table 18.

For brown rice, the most promising markets are in Europe: Netherlands, Italy, France, United Kingdom, Germany and Belgium (Table 14). For example, the Netherlands is one of the largest importers in the world (market share of 8 percent), it is dynamic (average annual growth between 2004 and 2008 of 43 percent), and it offers favourable market access conditions for Cambodian exporters (tariff applied to Cambodian brown rice is 7 percent, which is 4 percentage points lower than the average tariff that is applied to Cambodias main competitors on that market, such as India, Thailand and Guyana). Other attractive markets for brown rice are Korea and Malaysia. It is interesting to note that currently Cambodia does not export to any of the 10 most attractive markets for brown rice in the world, except Malaysia.

Rice sector profile

21

The main attractive markets for broken rice are in Africa: Ghana, Senegal, Cte dIvoire (Table 15). A few other countries apply a 0 percent tariff for broken rice from Cambodia (United States, United Arab Emirates, South America and Australia), while some countries apply much higher tariffs, in particular Japan (827 percent) and Malaysia (40 percent). In 2008, Cambodia exported to only to one country among the 20 most attractive markets in the world: Germany. Table 14. Attractive markets for brown rice (HS 100620)
Market Share of market in world imports (%) 8.1 5.1 7.0 9.3 15.1 6.5 9.3 3.4 4.2 2.4 Market growth 2004-2008 (% per year) 43 26 20 29 17 18 15 23 88 36 Tariff applied Cambodias to Cambodia tariff (%) advantage (+) or disadvantage (-) (%) 7 4 7 5 7 5 5 0 7 5 7 4 7 -4 7 7 40 0 0 0 Main competitors in this market

1. Netherlands 2. Italy 3. France 4. Korea 5. United Kingdom 6. Germany 7. Belgium 8. Portugal 9. Malaysia 10. Canada

India, Thailand, Guyana India, Pakistan, Thailand India, Thailand, Italy United States, China, Thailand India, Pakistan, United States India, Uruguay Thailand Italy, Spain, India Guyana, Dominic, Uruguay Thailand, Vietnam, Singapore United States, India, Pakistan

Source: ITCs Trade Map and Market Access Map. Trade for countries marked with * is estimated through mirror statistics. For more detailed information, see Annex Table 17.

Table 15. Attractive markets for broken rice (HS 100640)

Share of market in world imports (%) 1. Ghana 7.7 2. Cte d'Ivoire 7.3 3. Senegal 30.3 4. Belgium 4.5 5. Malaysia 4.4 6. Mauritania 3.8 7. Guinea 3.6 8. France 3.6 9. United Kingdom 3.6 10. Mali 2.1 Market Market growth 2004-2008 (% per year) High 32 25 38 116 51 26 22 16 39 Tariff applied Cambodias tariff to Cambodia advantage (+) or (%) disadvantage (-) (%) 20 0 10 0 10 0 14 2 40 0 13 0 10 0 14 -5 14 -3 10 0 Main competitors in this market Thailand, USA, Vietnam Thailand, Vietnam, Pakistan Thailand, Vietnam, Brazil Netherlands, Thailand, Pakistan Thailand, Vietnam, Pakistan Thailand, Brazil, Belgium Thailand, Pakistan, Vietnam Thailand, Spain, Italy Spain, Thailand, USA Thailand, Japan, India

Source: ITCs Trade Map and Market Access Map. Trade for countries marked with * is estimated through mirror statistics. For more detailed information, see Annex Table 19.

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Rice sector profile

References
Main references USDA United States Department of Agriculture (2010), Cambodia: Future growth rate of rice production uncertain, (www.pecad.fas.usda.gov/highlights/2010/01/cambodia). DAI, ADI and IDE (2008): Cambodia SME Development in Selected Agri-Sectors/Value Chains, Final Scoping and Design Report, July 2008. A report prepared for the International Finance Corporation/Mekong Private Sector Development Facility (IFC/MPDF) by Development Alternatives Inc (DAI) in association with Agricultural Development International (ADI) and International Development Enterprises (IDE). Eick R. and R. Mueller (2010), Making Cambodia a Reliable Rice Supplier to EU, Presentation, March. Slayton T. (2009), A Roadmap for Cambodian Rice Exports. Trade SWAp Pillar 2 Rice Task Team (2008), Export Supply Constraints and Strategy for Technical Assistance: The Rice Sector, Presentation, October. Further readings ADI Agricultural Development International (2009), Potential for Agribusiness Investment in the Cambodian Rice Industry, Presentation by Sok Muniroth and Tim Purcell, October. CEDAC (2009), Cambodia: Prices remain stable, Rice Outlook March 2009. Ear S. (2009), Sowing and Sewing Growth: The Political Economy of Rice and Garments in Cambodia, Stanford Center for International Development, Working Paper No. 384. FAO Food Outlook Global Market Analysis (December 2009), (www.fao.org/docrep/012/ak341e/ak341e06.htm). FAO Rice Market Monitor, (www.fao.org/economic/est/publications/rice-publications/rice-market-monitor-rmm/en/). Im S. (25 April 2008), Cambodia wants to be big rice exporter. Im S. (6 May 2008), Rice Export Association Encourages Increase in Supply. ITC International Trade Centre (2007), Export Potential Assessment in Cambodia. Junning Cai, Luyna Ung, Sununtar Setboonsarng, Ping Sun Leung (2008), Rice Contract Farming in Cambodia: Empowering Farmers to Move Beyond the Contract Toward Independence, ADB Institute Discussion Paper No. 109. MAFF Ministry of Agriculture, Forestry and Fisheries (2008), Agricultural Statistics Bulletin, Statistics Office, Department of Planning and International Cooperation. MAFF Ministry of Agriculture, Forestry and Fisheries (2008), Global Economic Crisis: Impact, Issues and Opportunities for Agriculture and Food Security. Presentation by General Directorate of Agriculture, MAFF.

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Mekong Times Daily (16 July 2008), Cambodia aims to become major rice exporter. Ministry of Commerce and United Nations Development Programme (UNDP) Cambodia (2007), Cambodias Trade Integration Strategy: Executive Summary and Action Matrix, Prepared under the Trade Related Assistance for Development and Equity (TRADE) Project, December. Srey V., Heung C., Bun C. (2008), Policy Measures and Economic Constraints Affecting Exports of Paddy Rice, part of the Trade Analysis and Reform Project (TARP) funded by AusAID. The Cambodia Daily (8 September 2009), Cambodian Rice Mills Need Investment. UNDP Cambodia (2009), Cambodia Country Competitiveness: Driving Economic Growth and Poverty Reduction, Discussion Paper No. 7. USDA US Department of Agriculture, Foreign Agricultural Service (2010), Cambodia: Future Growth Rate of Rice Production Uncertain, Commodity Intelligence Report (www.pecad.fas. usda.gov/highlights/2010/01/cambodia/). Yang Saing Koma (2008), Proposed Strategies to Utilize the Potential of Rice Production in Cambodia, CEDAC Agriculture and Rural Development Discussion Note. Yim Sok Sophors and Nhep Mengcheang (2009), Rapid Market Appraisal on Rice: 29 villages across 8 communes of 4 districts, Kompot Province, CEDAC Cambodian Center for Study and Development in Agriculture. Websites FAO Food and Agriculture Organization, FAOSTAT (http://faostat.fao.org/site/339/default.aspx). IMF International Monetary Fund, IMF Primary Commodity Prices (www.imf.org/external/np/res/commod/index.asp). IRRI (International Rice Research Institute), Rice Knowledge Bank (www.knowledgebank.irri.org/rice.htm). Includes Good Agricultural Practices (GAP) for irrigated and rain-fed rice. ITC International Trade Center, Trade Map and Market Access Map (www.intracen.org/marketanalysis). MAFF Cambodia Ministry of Agriculture, Forestry and Fisheries (www.maff.gov.kh/eng/statistics/index.html). Thai Rice Exporters Association. See www.thairiceexporters.or.th/price.htm for export price statistics of Thai rice and useful links to other price sources.

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Rice sector profile

Annex
Annex Table 1. Main paddy rice producers in the world
Level in 2008 Rank in production World 1. China 2. India 3. Indonesia 4. Bangladesh 5. Vietnam 6. Myanmar 7. Thailand 8. Philippines 9. Brazil 10. Japan 11. Pakistan 12. United States 13. Egypt 14. Cambodia 15. Korea, Rep. of 16. Nepal 17. Nigeria 18. Sri Lanka 19. Iran 20. Madagascar Source: FAO. Area harvested (million ha) 159.0 29.5 44.0 12.3 11.7 7.4 8.2 10.2 4.5 2.9 1.7 3.0 1.2 0.7 2.6 0.9 1.5 2.4 1.0 0.6 1.2 Yield (tons/ha) 4.3 6.6 3.4 4.9 4.0 5.2 3.7 3.0 3.8 4.2 6.5 3.5 7.7 9.7 2.7 7.4 2.8 1.8 3.8 5.6 2.5 Production (million tons) 685.0 193.4 148.3 60.3 46.9 38.7 30.5 30.5 16.8 12.1 11.0 10.4 9.2 7.3 7.2 6.9 4.3 4.2 3.9 3.5 3.0 Area harvested 103 97 98 104 109 97 130 104 110 78 96 125 98 113 137 87 99 108 124 118 101 Index 2008 (2000=100) Yield 111 105 118 111 115 123 110 114 123 139 97 116 109 107 130 110 103 117 109 151 120 Production 114 102 116 116 125 119 143 118 136 109 93 145 107 121 178 96 102 127 135 178 121

Annex Table 2. Top exporters of rice (HS 1006), 2008

Exporters Value (USD million) 21,117 6,108 2,896 2,843 2,440 2,214 1,857 818 519 481 444 312 4 Share in world exports ( %) 100.00 28.92 13.71 13.46 11.55 10.48 8.80 3.87 2.46 2.28 2.10 1.48 0.02 Trade balance (USD million) -980 6,097 2,853 2,843 2,438 1,616 -1,267 643 -999 298 444 86 -4 Quantity (1,000 tons) 32,255 10,216 4,745 3,536 3,050 4,655 1,714 805 525 969 745 518 6.4 Unit value (USD/ton) 655 598 610 804 800 476 1,084 1,017 988 497 596 602 639 Growth in value 2004-2008 (%/year) 23 23 26 24 30 15 .. 18 53 25 24 109 4 Growth in quantity 2004-2008 (%/year) 6 2 23 2 7 3 .. 2 29 9 4 65 14

World 1. Thailand 2. Vietnam 3. India 4. Pakistan 5. United States EU-27 6. Italy 7. U. Arab Emirates 8. China 9. Uruguay 10. Brazil (..) 52. Cambodia*

Source: ITCs Trade Map.Trade for countries marked with * is estimated through mirror statistics.

Rice sector profile

25

Annex Table 3. Top importers of rice (HS 1006), 2008

Importers Value (USD million) Share in Trade Quantity Unit value world balance imported (USD/ton) imports (%) (USD million) in 2008 (1,000 tons) 100.00 -980 a a 14.10 -1,267 3,260 959 8.86 -1,954 2,439 802 6.87 -999 1,294 1,172 5.22 -1,153 1,167 988 5.16 -1,140 1,225 931 3.67 -811 a a 2.92 -635 1,013 638 2.89 -574 630 1,013 2.7 1,616 632 945 2.45 -453 508 1,066 2.35 -512 1,300 400 Growth Growth Tariff faced Tariff faced in value in quantity by by 2004-2008, 2004-2008 Cambodia Thailand (%/year) (%/year) (%) (%) 23 6 .. .. 4.9 24.5 52 19 50 48 49 20 0 0 17 -2 0 0 34 5 4 4 49 116 40 40 22 2 10 10 19 3 4.9 24.5 22 11 0 1.4 15 2 4.9 24.5 46 21 5 5

World EU-27 1. Philippines 2. U. Arab Emirates 3. Saudi Arabia* 4. Iran* 5. Malaysia 6. Senegal 7. United Kingdom 8. United States 9. France 10. Bangladesh*

22,097 3,124 1,957 1,517 1,153 1,141 812 646 638 597 542 520

Source: FAO, ITCs Trade Map and Market Access Map. Trade for countries marked with * is estimated through mirror statistics. a. Quantity data for Malaysia are obviously wrong and affect the world total as well as unit values. They were excluded.

Annex Table 4. Cambodias exports of rice, 2008 (mirror data)

Product label Export value (USD 1,000) Trade balance Growth in value (USD 1,000) 2004-2008 (% p.a.) -3,713 2,198 -6,729 391 426 4 -8 7 .. .. Growth in quantity 2004-2008 (% p.a.) 14 9 .. .. .. Growth of world imports 2004-2008 (% p.a.) .. 28 23 18 14 Cambodias rank in world exports 51 52 42 41 27 Cambodias share in world exports (%) 0.02 0.02 0.03 0.04 0.05

1006 Rice 100630 Milled rice 100640 Broken rice 100620 Brown rice 100610 Paddy rice Source: ITCs Trade Map.

4,104 2,914 332 391 466

Annex Table 5. Top exporters of paddy rice (HS 100610), 2008

Exporters Value exported Share in world Trade balance in in 2008 exports 2008 (USD 1,000) (%) (USD 1,000) 877,853 744,440 39,643 13,170 9,705 8,446 8,060 7,491 7,380 6,799 5,418 466 100.00 84.86 4.52 1.50 1.11 0.96 0.92 0.85 0.84 0.77 0.62 0.05 -27,436 744,299 38,193 7,202 9,435 -27,181 -8,928 5,627 7,380 4,186 5,320 426 Quantity exported in 2008 (tons) 2,063,545 1,862,403 22,438 23,514 28,735 11,354 17,595 12,680 22,306 10,311 7,353 695 Unit value (USD/ton) Annual growth Annual growth in value in quantity 2004-2008 2004-2008 (%) (%) 20 4 20 5 33 15 -1 -18 46 24 8 -5 220 218 598 347 43 29 73 56 -8 -33 .. ..

World 1. United States 2. China 3. France 4. Paraguay 5. Italy 6. Brazil 7. Greece 8. India 9. Spain 10. Argentina (..) 27. Cambodia Source: ITCs Trade Map.

425 400 1,767 560 338 744 458 591 331 659 737 671

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Rice sector profile

Annex Table 6. Top exporters of brown rice (HS 100620), 2008

Exporters Value exported in 2008 (USD 1,000) 1,006,729 207,282 181,531 103,492 96,820 91,124 70,554 50,397 46,662 18,942 16,827 391 Share in world exports (%) 100.00 20.59 18.03 10.28 9.62 9.05 7.01 5.01 4.64 1.88 1.67 0.04 Trade balance in 2008 (USD 1,000) -761,776 165,049 181,292 103,465 6,002 91,106 70,169 -3,480 46,636 -145,356 16,531 391 Quantity exported in 2008 (tons) 1,519,689 403,908 293,649 62,676 106,071 164,018 145,426 53,506 100,312 12,850 23,993 702 Unit value (USD/ton) Annual Annual growth growth in in quantity value 2004-2008 2004-2008 (%) (%) 18 -1 13 -3 31 10 22 -27 43 30 32 10 23 13 -13 -28 19 3 20 13 24 4 .. ..

World 1. United States 2. Thailand 3. Guyana 4. Italy 5. Uruguay 6. China 7. Spain 8. Argentina 9. Belgium 10. Suriname (..) 41.Cambodia*

662 513 618 1,651 913 556 485 942 465 1,474 701 557

Source: ITCs Trade Map. Countries marked with * did not report in 2008 and their trade is estimated through mirror statistics.

Annex Table 7. Top exporters of milled rice (HS 100630), 2008

Exporters Value exported in 2008 (USD 1,000) 18,044,450 5,358,502 2,830,071 2,805,338 2,318,952 1,212,421 671,188 515,328 370,351 318,642 219,286 2,914 Share in world exports (%) 100.00 29.70 15.68 15.55 12.85 6.72 3.72 2.86 2.05 1.77 1.22 0.02 Trade balance in 2008 (USD 1,000) 490,300 5,348,392 2,830,030 2,803,147 2,317,376 680,283 629,680 -983,655 192,981 318,619 64,061 2,198 Quantity exported in 2008 (tons) 26,037,090 8,672,447 3,497,748 4,535,529 2,828,905 2,226346 621,160 521,657 799,474 501,526 319,454 4,425 Unit value (USD/ton) Annual Annual growth growth in in quantity value 2004-2008 2004-2008 (%) (%) 24 6 23 2 24 2 27 25 28 5 12 3 16 0 .. .. 25 8 25 7 170 144 -8 9

World 1. Thailand 2. India 3. Vietnam 4. Pakistan 5. United States 6. Italy 7. United Arab Emirates 8. China 9. Uruguay 10. Brazil (..) 52.Cambodia*

693 618 809 619 820 545 1,081 988 463 635 686 659

Source: ITCs Trade Map. Countries marked with * did not report in 2008 and their trade is estimated through mirror statistics.

Annex Table 8. Top exporters of broken rice (HS 100640), 2008

Exporters Value exported in 2008 (USD 1,000) 1,188,105 567,538 114,815 83,918 73,029 60,158 49,774 41,653 31,320 27,470 17,134 332 Share in world exports (%) 100.00 47.77 9.66 7.06 6.15 5.06 4.19 3.51 2.64 2.31 1.44 0.03 Trade balance in 2008 (USD 1,000) -678,221 567,413 114,807 82,344 72,836 -25,136 26,801 34,301 31,320 -5,225 9,168 -6,729 Quantity exported in 2008 (tons) 2,540,463 1,249,945 217,223 196,338 167,073 88,952 162,480 66,062 70,971 37,286 29,679 605 Unit value (USD/ton) Annual Annual growth growth in in quantity value 2004-2008 2004-2008 (%) (%) 22 5 21 3 329 34 4 -5 65 33 77 65 10 9 12 -2 27 6 16 14 7 -3 7 ..

World 1. Thailand 2. Pakistan 3. Vietnam 4. Brazil 5. Belgium 6. United States 7. Italy 8. Uruguay 9. Netherlands 10. Spain () 42. Cambodia*

468 454 529 427 437 676 306 631 441 737 577 549

Source: ITCs Trade Map. Countries marked with * did not report in 2008 and their trade is estimated through mirror statistics.

Rice sector profile

27

Annex Table 9. Cambodias exports of paddy rice (HS 100610), by partner

Importers Total Vietnam Malaysia Thailand Source: ITCs Trade Map. 2001 0 0 0 0 2002 0 0 0 0 2003 0 0 0 0 2004 0 0 0 0 2005 0 0 0 0 2006 11 0 5 6 2007 241 0 241 0 2008 466 466 0 0 2009 0 .. 0 0

Annex Table 10. Cambodias exports of brown rice (HS 100620), by partner
Importers Total Malaysia France Italy Source: ITCs Trade Map. 2001 676 676 0 0 2002 2,661 2,661 0 0 2003 968 968 0 0 2004 0 0 0 0 2005 178 178 0 0 2006 686 87 0 599 2007 751 478 0 273 2008 391 391 0 0 2009 1,238 1,059 179 0

Annex Table 11. Cambodias exports of milled rice (HS 100630), by partner
Importers Total France Malaysia Italy Germany Singapore Poland Belarus Philippines Romania Spain Lithuania Bulgaria Australia Netherlands Thailand China Belgium Canada Hong Kong (SARC) Chinese Taipei New Zealand United Kingdom United States Vietnam Saudi Arabia Source: ITCs Trade Map. 2001 496 0 496 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2002 1,905 143 370 371 0 0 0 0 0 0 0 0 0 19 0 0 0 938 0 46 0 18 0 0 0 0 2003 1,642 132 240 0 13 0 0 0 0 0 0 0 0 10 0 0 0 1,103 0 140 0 0 4 0 0 0 2004 2,914 647 0 0 0 0 0 0 0 0 0 0 0 84 35 0 0 1,814 1 316 0 0 0 17 0 0 2005 1,987 394 316 0 0 0 0 0 0 0 0 0 0 11 0 0 0 1,222 0 0 0 0 0 44 0 0 2006 2,397 1053 108 13 6 0 0 0 0 0 773 0 0 0 0 0 0 325 0 0 8 0 0 0 0 111 2007 832 564 69 5 12 32 0 0 0 0 0 0 0 13 0 0 0 0 80 0 46 0 0 9 2 0 2008 2,914 1,849 599 234 121 86 17 8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 .. 2009 10,455 8,739 0 0 92 0 .. 0 587 476 365 97 33 24 23 14 5 0 0 0 0 0 0 0 .. ..

Annex Table 12. Cambodias exports of broken rice (HS 100640)

Importers Total Singapore Germany France Italy Thailand Philippines Source: ITCs Trade Map. 2001 0 0 0 0 0 0 0 2002 0 0 0 0 0 0 0 2003 0 0 0 0 0 0 0 2004 251 0 0 251 0 0 0 2005 136 0 0 136 0 0 0 2006 86 0 0 77 9 0 0 2007 152 13 0 133 0 6 0 2008 332 268 64 0 0 0 0 2009 1,236 71 0 247 0 20 898

28

Rice sector profile

Annex Table 13. Top importers of paddy rice (HS 100610), 2008
Importers Value Share in Trade Quantity Unit value imported world balance imported in (USD/ton) in 2008 imports (%) in 2008 2008 (ton) (USD 1,000) (USD 1,000) 905,289 312,900 50,419 48,060 47,376 39,356 38,513 36,423 35,627 31,132 22,398 100 34.56 5.57 5.31 5.23 4.35 4.25 4.02 3.94 3.44 2.47 -27,436 -312,900 -50,338 -47,962 -46,954 -39,316 -38,513 -36,275 -27,181 -31,132 -22,398 1,984,299 716,491 126,132 120,217 102,594 58,694 96,535 76,389 46,767 71,098 36,972 456 437 400 400 462 671 399 477 762 438 606 Annual growth in value 2004-2008 (%) 14 19 8 11 8 16 44 17 32 16 360 Annual growth in quantity 2004-2008 (%) -3 4 -7 -4 -8 9 18 0 1 -1 435 Tariff faced by Cambodia Tariff faced by the US

World 1. Mexico 2. Honduras* 3. Nicaragua* 4. Costa Rica 5. Vietnam 6. Panama 7. Guatemala 8. Italy 9. El Salvador 10. Venezuela

.. 0 22.5 22.5 17.5 20 45 23.7 5.7 20 10

.. 0 22.5 22.5 17.5 20 45 23 28.5 20 10

Source: FAO, ITCs Trade Map and Market Access Map. * countries with mirror statistics.

Annex Table 14. Top importers of brown rice (HS 100620), 2008
Importers Value imported in 2008 (USD 1,000) 1,768,505 266,060 164,298 162,384 143,481 123,390 115,145 90,818 74,485 60,646 53,877 Share in world imports (%) 100 15.04 9.29 9.18 8.11 6.98 6.51 5.14 4.21 3.43 3.05 Trade Quantity Unit balance imported in value in 2008 2008 (ton) (USD/ton) (USD 1,000) -761,776 -263,229 -145,356 -162,313 -136,446 -109,646 -100,709 6,002 -74,450 -60,359 -3,480 2,151,611 241,849 182,600 261,414 155,227 130,785 128,605 103,254 .. 98,047 67,778 822 1,100 900 621 924 943 895 880 .. 619 795 Annual growth in value 2004-2008 (%) 18 15 15 24 36 16 17 23 122 18 49 Annual growth in quantity 2004-2008 (%) 0 -4 1 10 15 0 1 13 .. 3 32 Tariff faced by Cambodia Tariff faced by the US

World 1. United Kingdom 2. Belgium 3. Korea 4. Netherlands 5. France 6. Germany 7. Italy 8. Malaysia 9. Portugal 10. Spain

.. 2 2 5 2 2 2 2 40 2 2

.. 9.7 9.7 5 9.7 9.7 9.7 9.7 40 9.7 9.7

Source: FAO, ITCs Trade Map and Market Access Map.

Annex Table 15. Top importers of milled rice (HS 100630)

Importers Value imported in 2008 (USD 1,000) 17,554,150 1,951,063 1,498,983 1,147,656 1,133,698 653,763 532,138 504,594 503,975 470,435 446,339 Share in world imports (%) 100 11.11 8.54 6.54 6.46 3.72 3.03 2.87 2.87 2.68 2.54 Trade Quantity Unit balance imported in value in 2008 2008 (ton) (USD/ton) (USD 1,000) 490,300 22,514,400 -1,950,361 2,432,686 -983,655 1,278,230 -1,147,540 1,160,806 -1,133,451 1,213,308 -653,199 1,293,836 680,283 532,571 -504,536 956,867 -498,757 1,290,212 -470,435 568,296 -437,673 626,429 780 802 1,173 989 934 505 999 527 391 828 713 Annual growth in value 2004-2008 (%) 27 52 .. 17 40 41 22 44 46 24 20 Annual growth in quantity 2004-2008 (%) 5 19 .. -2 -3 .. 8 19 21 22 -1 Tariff faced by Cambodia Tariff faced by the US

World 1. Philippines 2. U. Arab Emirates 3. Saudi Arabia* 4. Iran* 5. Malaysia 6. United States 7. Benin* 8. Bangladesh* 9. Cuba* 10. South Africa

.. 50 0 0 4 40 0 10 5 15 0

.. 50 0 0 4 40 1 10 5 15 0

Source: FAO, ITCs Trade Map and Market Access Map. * countries with mirror statistics.

Annex Table 16. Top importers of broken rice (HS 100640)

Importers Value imported in 2008 (USD 1,000) 1,866,326 568,427 144,265 136,296 85,294 82,764 67,978 67,308 67,222 63,900 40,612 Share in world imports (%) 100 30.46 7.73 7.30 4.57 4.43 3.64 3.61 3.60 3.42 2.18 Trade Quantity Unit balance imported in value in 2008 2008 (ton) (USD/ton) (USD 1,000) -678,221 -557,050 -144,265 -134,400 -25,136 -82,764 -65,317 -61,367 -67,222 -63,896 -40,398 4,719,577 895,381 277,978 214,248 154,192 105,775 101,098 110,381 176,463 108,412 123,242 395 635 519 636 553 782 672 610 381 589 330 Annual growth in value 2004-2008 (%) 23 19 34 42 62 22 14 17 7 14 Annual growth in quantity 2004-2008 (%) 11 0 -7 14 31 20 8 2 -4 -6 4 Tariff faced by Cambodia Tariff faced by the US

World 1. Senegal 2. Ghana 3. Cte d'Ivoire 4. Belgium 5. Malaysia 6. France 7. United Kingdom 8. Guinea 9. Japan 10. Kenya

.. 10 20 10 5.2 40 5.2 5.2 10 827 75

.. 10 20 10 26 40 26 26 10 827 75

Source: ITCs Trade Map and Market Access Map.

Annex Table 17. Attractive markets for brown rice (HS 100620)
Market Cambodias Market export to total the market imports (USD from the 1,000 ) world Share of market in world imports Market Market Tariff Cambodias growth in growth in applied to tariff value value Cambodia advantage (relative (absolute (%) (+) or change) change) disadvantage (-) (%) 42.7 107,837 7 4 26.2 54,971 7 5 19.9 63,618 7 5 28.9 104,634 5 0 16.7 122,556 7 5 18.3 56,386 7 4 14.8 69,838 7 -4 23.1 34,198 7 7 88.1 68,529 40 0 36.4 30,585 0 0 52.4 31,757 7 5 13.1 16,435 0 2 31.5 31,121 25 -20 40.9 14,484 3 0 -1.4 -2,986 10 -10 107.4 16,076 7 -4 High 20 0 17 283.2 4,722 0 0 446.3 8,894 10 0 High 3,067 0 0 Main competitors in this market

1. Netherlands 2. Italy 3. France 4. Korea 5. United Kingdom 6. Germany 7. Belgium 8. Portugal 9. Malaysia 10. Canada 11. Spain 12. United States 13. Jamaica 14. Haiti 15. Brazil 16. Poland 17. Belarus 18. Libya 19. Niger 20. Papua N. Guinea

0 0 0 0 0 0 0 0 391 0 0 0 0 0 0 0 0 0 0 0

142,065 90,820 123,387 164,004 266,060 115,145 164,297 60,647 74,484 42,988 38,990 42,231 46,731 19,404 53,297 16,994 20 4,744 8,904 3,067

8.1 5.1 7.0 9.3 15.1 6.5 9.3 3.4 4.2 2.4 2.2 2.4 2.6 1.1 3.0 1.0 0.0 0.3 0.5 0.2

India, Thailand, Guyana India, Pakistan, Thailand India, Thailand, Italy United States, China, Thailand India, Pakistan, United States India, Uruguay Thailand Italy, Spain, India Guyana, Dominic, Uruguay Thailand, Vietnam, Singapore United States, India, Pakistan Uruguay, United States, France India, Pakistan, UAE Guyana, United States, Suriname United States, Guyana Argentina, Uruguay, Italy Germany, Italy, Guyana Pakistan, Switzerland Egypt, Italy Thailand, India, Indonesia United States, China, Thailand

Source: ITCs Trade Map and Market Access Map. Calculations by ITC.

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Rice sector profile

Annex Table 18. Attractive markets for milled rice (HS 100630)
Market Cambodias Market export to total the market imports (USD from the 1,000 ) world 0 0 0 0 0 599 0 0 0 0 0 0 0 0 0 0 0 0 86 0 1,849 8 121 234 17 1,498,984 1,113,584 1,145,412 1,951,065 532,139 653,763 499,827 503,015 446,339 350,841 224,496 243,706 331,958 137,143 157,603 162,630 240,711 254,142 219,009 112,023 344,568 25,419 225,388 41,508 64,225 Share of market in world imports Market growth in value (relative change) 40 33 21 65 20 48 48 29 22 52 55.6 32.6 18.8 73.7 40.2 18.2 15.7 13.4 18 75.8 14 30.7 19.5 31.8 10.4 Market Tariff Cambodias growth in applied to tariff value Cambodia advantage (absolute (%) (+) or change) disadvantage (-) (%) 813,356 0 0 444,401 4 0 612,550 0 0 1,688,738 50 0 274,881 0 1 517,485 40 0 396,467 10 0 319,772 5 0 244,044 0 0 285,569 0 0 186,241 0 0 163,846 0 0 165,219 10 0 122,092 0 0 116,868 0 0 79,413 0 21 106,265 0 0 100,722 0 0 106,975 0 0 100,238 0 0 137,167 17 -10 16,704 0 17 115,008 17 -6 27,736 17 3% 20,944 17 -8% Main competitors in this market

1. U. Arab Emirates 2. Iran 3. Saudi Arabia 4. Philippines 5. United States 6. Malaysia 7. Benin 8. Bangladesh 9. South Africa 10. Oman 11. Yemen 12. Kuwait 13. Cte d'Ivoire 14. Qatar 15. Australia 16. Russian Fed. 17. Canada 18. Hong Kong 19. Singapore 20. Libya 21. France 22. Belarus 23. Germany 24. Italy 25. Poland

9.0 6.6 6.8 11.6 3.2 3.9 3.0 3.0 2.7 2.1 1.3 1.5 2.0 0.8 0.9 1.0 1.4 1.5 1.3 0.7 2.1 0.2 1.3 0.2 0.4

India, Pakistan, Thailand UAE, Pakistan, Uruguay India, Pakistan, USA Vietnam, Thailand, USA Thailand, India, China Thailand, Vietnam, Pakistan Thailand, Brazil, Pakistan India, Thailand, Pakistan Thailand, India, China Pakistan, Thailand, UAE Thailand, India, Pakistan India, Pakistan, Thailand Thailand, Vietnam, Pakistan Pakistan, India, Thailand Thailand, India, Pakistan Thailand, Vietnam, China USA, Thailand, India Thailand, China, Australia Thailand, India, Vietnam Thailand, Egypt, Taiwan Italy, Thailand, Spain Pakistan, Vietnam, India Italy, Thailand, Netherlands Thailand, Germany, France Greece, Italy, Vietnam

Source: ITCs Trade Map and Market Access Map. Calculations by ITC.

Annex Table 19. Attractive markets for broken rice (HS 100640)
Market Cambodias Market export to total the market imports (USD from the 1,000 ) world 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 64 0 0 0 0 268 144,265 136,297 568,428 85,293 82,764 72,317 67,221 67,977 67,308 40,287 63,900 22,973 16,600 7,617 28,974 28,484 12,436 13,064 126 14,064 7,216 Share of market in world imports Market growth in value (relative change) High 31.7 25.1 38.4 116.2 51.0 25.9 21.9 16.2 39.3 13.0 114.2 119.7 110.5 36.0 26.5 61.4 45.3 High 68.8 13.1 Market Tariff Cambodias growth applied to tariff in value Cambodia advantage (absolute (%) (+) or change) disadvantage (-) (%) 144,265 20 0 90,958 10 0 336,368 10 0 62,036 14 2 78,973 40 0 58,419 13 0 40,431 10 0 37,230 14 -5 30,358 14 -3 29,588 10 0 24,733 827 0 21,882 0 1 15,887 10 0 17,555 0 0 20,511 22 0 17,346 14 -1 10,604 0 0 10,136 0 0 126 3 25 12,330 6 -1 2,800 0 0 Main competitors in this market

1. Ghana 2. Cte d'Ivoire 3. Senegal 4. Belgium 5. Malaysia 6. Mauritania 7. Guinea 8. France 9. United Kingdom 10. Mali 11. Japan 12. United States 13. Niger 14. UAE 15. Indonesia 16. Germany 17. South Africa 18. Australia 19. Thailand 20. Chile 21. Singapore

7.7 7.3 30.3 4.5 4.4 3.8 3.6 3.6 3.6 2.1 3.4 1.2 0.9 0.4 1.5 1.5 0.7 0.7 0.0 0.7 0.4

Thailand, United States, Vietnam Thailand, Vietnam, Pakistan Thailand, Vietnam, Brazil Netherlands, Thailand, Pakistan Thailand, Vietnam, Pakistan Thailand, Brazil, Belgium Thailand, Pakistan, Vietnam Thailand, Spain, Italy Spain, Thailand, United States Thailand, Japan, India Thailand, United States, China Thailand, Mexico, China Thailand, Pakistan, Vietnam Pakistan, Thailand, India Thailand, Vietnam, Pakistan Netherlands, Thailand, United States Vietnam, Thailand, India Thailand, United States, Pakistan France Argentina, Brazil, Uruguay Vietnam, Thailand, Myanmar

Source: ITCs Trade Map and Market Access Map. Calculations by ITC.

Rice sector profile

31

Annex Table 20. Top rice-producing provinces in Cambodia (2008-09)

Province / City Rainy season 2008 Harvested Area (ha) Prey Veng Takeo Kampong Cham Battambang Banteay Meanchey Kampong Thom Svay Rieng Siem Reap Kandal Kampong Chhnang Kampot Pursat Kampong Speu Kratie Oddar Meanchey Preah Vihear Stung Treng Rattanakiri Preah Sihanouk Mondulkiri Koh Kong Phnom Penh Pailin Kep Total Source: MAFF. 250,339 181,383 166,285 244,586 213,841 164,279 160,250 178,778 43,507 105,222 125,605 98,810 105,141 29,778 50,390 37,624 23,045 24,346 12,732 16,392 9,619 5,031 2,750 3,000 2,252,733 Product output (ton/ha) 2.754 2.987 3.009 2.664 2.532 2.186 2.244 1.971 2.926 2.584 2.748 2.624 2.335 2.581 2.074 2.000 2.500 1.862 2.500 1.826 2.341 3.402 3.116 2.611 2.540 Production Yield (ton) 689,434 541,853 500,352 651,551 541,445 359,114 359,573 352,347 127,304 271,940 345,105 259,262 245,504 76,857 104,509 75,248 57,613 45,332 31,830 29,932 22,518 17,116 8,570 7,833 5,722,142 Dry season 2008-09 Harvested Area (ha) 72,654 74,224 52,993 4,839 2,350 20,468 14,828 16,000 57,170 22,914 2,375 3,465 146 13,979 57 18 -----200 1,950 -360,630 Product output (ton/ha) 4.200 4.500 3.780 4.384 3.450 3.744 3.950 3.800 4.145 3.827 3.797 3.253 3.000 2.518 -2.111 -----5.250 3.500 -4.030 Production Yield (ton) 305,146 334,031 200,310 21,214 8,108 76,627 58,570 60,800 236,996 87,692 9,018 11,272 438 35,196 -38 -----1,050 6,825 -1,453,331 Total year 2008-09 Harvested Area (ha) 322,993 322,993 255,607 219,278 249,425 216,191 184,747 175,078 194,778 100,677 128,136 127,980 102,275 105,287 43,757 50,447 37,642 23,045 24,346 12,732 16,392 9,619 5,231 4,700 3,000 2,613,363 Product output (ton/ha) 3.079 3.427 3.195 2.697 2.542 2.359 2.388 2.121 3.619 2.807 2.767 2.645 2.336 2.561 2.072 2.000 2.500 1.862 2.500 1.826 2.341 3.473 3.276 2.611 2.746 Production Yield (ton) 994,580 875,884 700,662 672,765 549,553 435,741 418,143 413,147 364,300 359,632 354,123 270,534 245,942 112,053 104,509 75,286 57,613 45,332 31,830 29,932 22,518 18,166 15,395 7,833 7,175,473

32

Rice sector profile

Ministry of Commerce
Lot 19-61,MoC Road (113 B Road), Phum Teuk Thla Sangkat Teuk Thla, Khan Sen Sok, Phnom Penh Kingdom of Cambodia Tel : (855) 23 213 067 http: //www.moc.gov.kh

United Nations Development Programme

Pasteur Street, Boeung Keng Kang P. O. Box 877, Phnom Penh, Cambodia Tel : (855) 23 216 167 or 214 371 Fax : (855) 23 216 257 or 721 042 E-mail : registry.kh@undp.org http: //www.undp.org