Monday, January 21, 2019

Tearful

The bad news. Let's hear it. Reuters (Jan. 16): 
'The European Union will impose tariffs on rice from Cambodia and Myanmar from Friday to curb a surge in imports, the European Commission said on Wednesday. 
The decision, which will be in effect for three years, follows a “safeguard” investigation launched last March after a request from the Italian government. Rice is grown in eight southern European countries from Portugal to Bulgaria. 
In the absence of an opinion by the relevant committee, the Commission took the final decision itself on Wednesday. 
Cambodia and Myanmar benefit from the EU’s “Everything But Arms” scheme which allows the world’s least developed countries to export most goods to the European Union free of duties. But the Commission said its investigation had confirmed that a significant increase in imports of longer-grained Indica rice from Cambodia and Myanmar had damaged EU producers. 
From Jan. 18 it will set a duty of 175 euros (£155) per tonne of rice in the first year, dropping to 150 euros in the second and 125 euros in year three, it said'.
Southeast Asia Globe (Jan. 18) adds:
'Starting today, Cambodia and Myanmar will be forced to pay hefty tariffs to export rice to the European Union – and farmers fear that it will leave both nations’ rice industries in critical condition'.
It also looks at the implications. 
In short term, Cambodia's rice export sector will have to absorb the additional duties to be paid. 
Long term though, it's presumed that other markets will have to be found. Co-incidence or not, but the PM is off to China shortly looking for increased market opportunities.

The Khmer Times (Dec. 10) had an interesting look at the current problem:
'A year ago, the European Union offered Cambodia the option of using a unique Harmonised Systems Code (HS Code) for its Jasmine fragrant rice and white rice to differentiate it from other Indica rice, a move that could have saved the nation from the conundrum it now finds itself in. 
But this did not materialise because of what some have described as a powerful combination of apathy and arrogance that led key players to believe that Cambodia could not be harmed so long as she is shielded by the Everything-but -arms (EBA) privileges rendered to Least Developed Countries (LDCs). 
Then the ball dropped. EU launched a safeguard inquiry to determine whether imports of semi-milled and milled Indica rice from Cambodia and Myanmar resulted in “serious difficulties to EU producers of like or competing products”.
...
While criticism is rife that the government and the Cambodia Rice Federation (CRF) could have scuttled the entire classification process with a forceful and united front against the EU, there is also the long-standing quandary of whether Cambodian rice is of the Indica variety or not.
The truth is that Cambodia produces Jasmine fragrant rice and white rice for the EU market, which fall squarely under the Indica rice classification.
... 
Critics opine that Cambodia is ‘crying’ because not only did the letters sent by major rice exporters Amru Rice and Signatures of Asia lack exposure in the EU and were a tad emotional, but also the entire move to safe the nation from the tariffs was allegedly devoid of a united front. 
They also alleged that the cartels in CRF made up of rice exporters were more interested in sustaining a profit margin than fighting for the sake of rice farmers, which they fervently claim to do. 
According to a source close to the issue, exporters and millers, who largely make up CRF, are said to buy rice from farmers at low rates, often below market prices'.
So, own fault?

Challenged
The advent of the new year has meant a look at the past year in which exports of rice failed to grow.
The Phnom Penh Post (Jan. 11):
'The Kingdom’s rice exports saw a 1.5 per cent drop last year compared to 2017 due to the industry’s lingering challenges – the cost of production and competition with the international market. 
Ministry of Agriculture, Forestry and Fisheries figures show that the country exported 626,225 tonnes of rice last year, decreasing 1.5 per cent from 635,679 tonnes in 2017. 
According to the figures, the main destinations for rice exports were the EU with a total of 269,127 tonnes and China with 170,154 tonnes'.
Earlier the same source (Jan. 9) also noted an increase in value of rice, which to a degree offsets the lagging export figures. At least for farmers:
'As a result of more rice facilities constantly being installed, the price of paddy rice for the 2018-2019 season was between 900 riel and 1,300 riel ($0.22 and $0.32) per kg, an increase on the previous season, according to industry insiders. 
Cambodia Rice Federation vice-president Vong Bun Heng noted that the price was a 25 per cent increase on the 2017-2018 season. The price depends on the type of rice and its quality, with premium paddy rice sold at 1,300 riel per kg, with normal rice sold at 900 riel per kg, according to Bun Heng'.
Agribusinessglobal (Jan. 16) looks at what seems to be a lesser positive development, environmentally:
'BASF on Wednesday inaugurated its first wholly-owned company in Cambodia: BASF (Cambodia) Co. Ltd., and will launch three new crop protection products in the country.
 ...
“Though Cambodia has quickly become a leading exporter of high-quality premium rice, a number of challenges remain for the country’s agricultural sector, including relatively lower levels of technology use and understanding by growers on how best to utilize innovations,” said Martin Wolf, ASEAN Business Director, BASF Agricultural Solutions. “We believe BASF is well suited to help address these challenges and are excited to help Cambodian farmers become more profitable and sustainable.”
... 
Three new crop protection products will be initially launched, empowering farmers and growers with more tools in their toolbox to manage their crops:
Basagran [Bentazon] Herbicide – for broadleaf weeds and sedges in rice
Tetris Herbicide [profoxydim]– for weed grasses in rice
Regent 50 SC Insecticide [Fipronil]– for stemborer, thrips and leaf folder in rice'.
Urge
Regionally, it's also about statistics.
Bangkok Post (Jan. 8) looks back at the year gone:
'Thailand exported 11.13 million tonnes of rice worth US$5.62 billion in 2018, but exports will drop this year, according to the Foreign Trade Department. Director-general Adul Chotinisakorn said on Tuesday that last year's rice exports were worth 180.41 billion baht, met the target and helped raise local paddy prices and farm incomes. He expected exports would drop slightly this year. The department would try to increase the export value and encourage farmers to grow quality rice and high-demand rice'.
The Nation (Jan. 9) notes that the remaining rice of the rice-pledging scheme is now off the market:
'All 16.84 million tonnes of rice in the government stockpile have now been released to the markets, securing some Bt145.08 billion in sales over the few years, according to the Ministry of Commerce.Adul Chotinisakorn, director-general of the Department of Foreign Trade under the Ministry of Commerce , said the department had cleared all of the remaining stock under the present administration from May 2014 to December last year.As a result, the government no longer bears the storage cost of more than Bt1 billion per month. Furthermore, the sales will normalise rice production, trade and prices according to market mechanism, while Thailand will gain the confidence of local and foreign consumers, he said'.
Then this piece of news from Thailand. Bangkok Post (Dec. 10):
'Deputy Prime Minister Somkid Jatusripitak has urged the Commerce and Agriculture and Cooperatives ministries to work with manufacturers to cut fertiliser prices by 30% to support the farm sector'.
Sometimes the Thai government just does not know what to do. Go organic, self-sufficient or chemi-agriculture? Fact is, current fertilizers are often of poor quality. Now that's an area the junta itself can improve ...

Phnom Penh Post (Dec. 18) looks at Lao affairs:
'Laos has achieved its target for exporting rice to China this month after the IDP Rice Mill of Laos signed a trading agreement with China National Cereals, Oils and Foodstuffs Corporation (Cofco) in November.
 Last year, the Chinese government agreed to purchase 20,000 tonnes of rice from Laos through Xuanye (Lao) Co Ltd, but up to October the country had exported just 16,800 tonnes, according to the Ministry of Industry and Commerce. 
The company first exported 1,000 tonnes of rice and will be exporting the remaining 2,200 tonnes by the end of this month, Minister of Industry and Commerce Khemmani Pholsena informed Parliament'.
Slowed
Looking at the main alternatives for rice in Cambodia, the Phnom Penh Post (Jan. 8) adds on corn:
'Cambodian corn production saw slow development last year with crop yields increasing a mere two per cent on 2017 to 715,000 tonnes, remaining far short of Cambodia’s peak in 2012 when production reached nearly one million tonnes.
According to United States Department of Agriculture (USDA) figures – endorsed by Minister of Agriculture, Forestry and Fisheries Veng Sakhon – Cambodian corn production amounted to 715,000 tonnes last year, up from 700,000 tonnes in 2017. 
However, the USDA data highlighted a big gap compared to Cambodia’s peak in 2012 when corn production amounted to 951,000 tonnes, the highest since records began in 1960. 
Sakhon said on Sunday that the Kingdom’s corn production is slowed by the fact that the crop is still grown on smaller scale family farms, while market prices fluctuate annually due to a lack of modernisation of growing and drying methods'.
Khmer Times (Jan. 10) reports on investments in the kingdom's cassava sector:
'TWPC Investment (Cambodia) Co Ltd, from Thailand, will start cassava-processing operations this year in Oddar Meanchey, absorbing the entire cassava production from the province, said Ho Ren Hua, director of the company. 
Mr Ren Hua said this during a meeting on Tuesday with Agriculture Minister Veng Sakhon, adding that his company invested in the agro-industry here after receiving approval from the Ministry of Industry and Handicrafts at the end of 2017.
 “Currently, the company has completed the construction of the factory but the processing stage will start soon. There are plans to expand the production of cassava from 40,000 to 50,000 tonnes and increase processing capacity to 200,000 tonnes in the future'.
Phnom Penh Post (Dec. 19) adds:
'Hong Kong-based Green Leader Holdings Group Co Ltd, which announced its first cassava processing factory earlier this year, aims to commence operations by next year, according to Green Leader (Cambodia) Co Ltd CEO Gao Hua. 
The company is set to invest a total of $150 million in the cassava industry, which its first broke ground in April in Kratie province. Construction has been delayed, with the factory originally planned to be launched by the end of the year.
“The factory is nearly 70 per cent completed, as it was delayed due to rainy season and some technicalities in construction. The installation facility has already been prepared and we are awaiting shipments from China,” Gao said, adding that the factory is to commence operations by February next year. The Kratie province factory is located on 20ha of land in Snuol district, making it the largest such facility in Cambodia. It will be able to process some 600,000 tonnes of fresh cassava roots per year, with an annual production capacity of 150,000 tonnes of modified starch'.
On a side note, the Khmer Times (Dec. 12) has news on exports that take place via Vietnam. And it's not good:
'Local exporters have voiced concern over new customs regulations in Vietnam that require the submission of phytosanitary certificates for agricultural and livestock transshipments, arguing that they represent a significant barrier to trade. 
According to a circular issued by the Vietnamese Ministry of Agriculture and Rural Development, agricultural goods and livestock being shipped to a third country through Vietnam must be placed under quarantine.
As per the regulation, exporters are also required to present phytosanitary certifications at the loading port (Phnom Penh) as well as the Vietnamese port through which the shipment will be conducted'.
Markets and more
Then a listing of other Cambodia ag news mostly cropping.
Starting with pepper. The Phnom Penh Post (Dec. 7):
'The Kingdom’s non-GI pepper farmers continue to struggle due to low prices while cultivation is projected to decline next year, said Dar-Memot Pepper Agriculture Development Cooperative executive director Yin Sopha. 
Sopha said the market price for non-GI pepper this year is still under the margin of cost production, as the sector is expected not to expand next year. 
Since the beginning of the harvest season, pepper prices have stood at $2.6 per kg, which are under the profit margin. He said the lower price is due to the global market. 
“Pepper prices cannot increase anymore, as the pepper industry’s global supply is more than the need – the price is not beneficial for farmers and the growth of cultivation will not increase anymore. 
Sopha said that the sector would no longer be a viable investment option if prices keep dropping'.
The  Khmer Times (Dec. 27) continues:
'The Kampot Pepper Promotion Association has sold just 50 tonnes of the coveted commodity, an 80 percent drop compared to last year.
 The dip in sales follows a decrease in production due to unfavorable weather conditions throughout the year, the association reported. 
Total pepper production decreased by about 30 tonnes, the association said, amounting to just 70 tonnes in 2018. This has been explained as the result of heavy downpours during the beginning of the growing season. 
Only about 50 tonnes of the crop were sold to export companies, 80 tonnes less than in 2017, said Ngoun Lay, president of the Kampot Pepper Promotion Association, who explained that the market has shrank'.
Then on to another niche product. The Khmer Times (Dec. 11) on palm sugar:
'Kampong Speu province’s palm sugar will be recognised as a geographical indication (GI) in the European Union early next year, an official from the Ministry of Commerce said. 
Op Rady, director of intellectual property at the ministry, told Khmer Times that palm sugar from Kampong Speu, which is already considered a GI product in the Kingdom, will become the second Cambodian product to be awarded GI status by the EU, and that registration will happen early 2019. 
He explained, however, that the process is taking longer than expected.
... 
Chan Sokheang, chairman and CEO of Signatures of Asia, told Khmer Times that his company plans to purchase about 130 tonnes of organic palm sugar from Kampong Speu and other Cambodian provinces. 
Signatures of Asia will spend around $234,000 to buy the palm sugar, which will be exported to the EU, mainly Italy, Spain, the Netherlands, Germany, Czech Republic, and France, Mr Sokheang added'.
Onwards to the fruit and veggies. The Khmer Times (Jan. 4)
'The area around Boeung Tamouk Lake, in the outskirts of Phnom Penh, will be built into a massive market to centralise the supply of locally grown and imported vegetables, according to recently revealed government plans. 
The project, which will see 20 hectares around the lake developed to host the market, has already been endorsed by Prime Minister Hun Sen, according to a letter that the Office of the Council of Ministers sent yesterday to the Ministry of Land Management to request a construction permit for the project'.
Banana's. The Khmer Times (Jan. 11):
'Longmate Agriculture is shipping banana containers to China through Vietnam to prepare for its first direct shipment to the East Asian giant, a company representative said.
Longmate Agriculture, a joint venture of Chinese and local investors, is preparing a direct shipment of bananas to China. It will be the first time Cambodia exports the fruit to China.
...
Bananas will become the fourth agricultural product that Cambodia exports to the Chinese market, together with maize, cassava, and milled rice.
... 
Longmate Agriculture is now cultivating 400 hectares of land in Kampot province’s Chhouk district. It plans to grow the plantation to 1,000 hectares in the future.
The company will export about 25,000 tonnes of bananas this year and plans to double the figure in 2020'.
Khmer Times (Jan. 3) on pomelo's:
'After obtaining Geographical Indication (GI) status in June, demand for the pomelo grown in Kratie’s Koh Trong commune has spiked, with producers planning an expansion to meet it. 
The Koh Trong pomelo is only the third Cambodia product to be given the distinction, following Kampot pepper and Kampong Speu’s palm sugar. 
Chan Rina, president of the Koh Trong Pomelo Producer Association, said after GI status was awarded to their pomelo they have been unable to produce enough to satisfy rising demand from locals'.
Taxed
The Khmer Times (Dec. 11):
'Rubber export prices saw a continuous decrease this year impacted by uncertainties created by the US-China trade war and a surplus of rubber in the international market, insiders said yesterday. 
As of last week, rubber prices fell to $1,260 per ton from $1,500 early this year, said Men Sopheak, vice president of Chop Rubber Plantation in Tboung Khmum province.
 In the last months of 2016, a ton sold for $1,700, but from January to March of 2017 it traded at $2,200. Prices went down to $1600 in December last year, according to data from the General Directorate of Rubber at the Ministry of Agriculture.
“The fall in prices is caused by the US-China trade war which is putting pressure on China, a big rubber importer, to fight for cheaper rubber prices. This is resulting in an oversupply of rubber in the global market,” he added.
...
"The rubber export tax is still an issue for the local rubber exporters because the government takes $50 in taxes per ton of rubber, which sells for $1,000 or more. However, our production costs amount to $1,400 or more per ton.
“We would like to request the government not to tax rubber exports because other rubber-producing countries do not tax the sector,” Mr Heng said, adding that giving tax incentives will attract investors into the country.
Despite the decline in prices, from January to October, Cambodia exported 161,527 tonnes of rubber, an increase of 23 percent compared to the same period in 2017, according to the ministry'.
Khmer Times (Dec. 20) reports on how the Cambodia does not seem to be stimulating its own rubber sector:
'The Ministry of Agriculture is now discussing the Rubber Law with industry players and plans to send a draft to the Council of Ministers for approval next year, according to a high-ranking official.
... 
Lim Heng, vice president of An Mady Group, told Khmer Times that far from boosting the rubber industry, the law will increase the burden on the private sector. 
As per the current draft, businesses and investors involved in the rubber sector will have to secure a myriad of licenses before beginning operations. The amount of red tape involved will significantly increase, making it a much longer and arduous process for those interested in entering the market, he said.
...
General Department of Rubber’s Mr Sopha, however, said that the law simply provides a foundation, and that it is meant to serve as a guideline. Once passed, it will be enhanced with a series of sub-decress and a strategic plan for the sector to ensure that farmers and businesses are not negatively impacted'.
The Khmer Times (Dec. 21) also notes how a passed stimulus for the cashew sector is yet to take place:
'The Agriculture Ministry yesterday said Cambodia is still waiting for Vietnamese companies to invest in Cambodia’s cashew, after a Memorandum of Understanding was signed almost a year ago. 
In January, the ministry signed the MoU with the Vietnam Cashew Association to bolster Cambodia’s cashew production to one million tonnes per year.
“They wanted to come to sign an agricultural contract with local farmers to export cashew nuts, but until now I have not received any new requests from the Vietnamese side to invest here,” said Kong Pheach, director of the ministry’s agro-industry department.'
Some news from Laos, oddly that the source is Cambodian. The Phnom Penh Post (Jan. 10) looks at coffee:
'Coffee growers in southern Laos are asking for government assistance to create a fund to support coffee bean processing and provide technical advice to local growers following the recent slump in the market price.
Lao Coffee Association head Sivixay Xayyaseng told Vientiane Times: “The price of green coffee has fallen due to increasing supply on the global market. Especially increased green coffee bean production from Indonesia which is one of the biggest exporters. 
Export Grade A green coffee beans, the highest quality grown in Laos, are currently shipping to Japan for $2,200 per tonne while Grade D green coffee beans fetch $1,300 per tonne in Vietnam. Grade A beans hit a peak of $4,800 per tonne in the past.
 About 6kg of coffee cherries are needed to produce 1kg of green coffee beans. The grade is dependent on many factors such as the quality of the coffee cherries as well as the processing. 
The recent fall in the coffee price has also adversely affected local processers'.
To be
Finally, on topic (slightly) The Guardian (Jan. 13) let's readers get acquainted with what they say are five genetically modified fruits. 
Problems are what do we call GM? 
For instance two examples provided employ CRISPR techniques. Are they GM or not? They are certainly a technique which favours big biz, that's for sure. 
Interesting comments under this article. 
See also this Guardian article (Jul. 25, 2018):
'Plants and animals created by innovative gene-editing technology have been genetically modified and should be regulated as such, the EU’s top court has ruled.
The landmark decision ends 10 years of debate in Europe about what is – and is not – a GM food, with a victory for environmentalists, and a bitter blow to Europe’s biotech industry.
 It also marks a setback for UK scientists who took advantage of a legal grey area to begin field trials of gene edited camelina crops, augmented with Omega-3 fish oils'