Cambodia's EU rice exports fall sharply after tariffs; China sales up

PHNOM PENH (Reuters) - Cambodia’s rice exports to the European Union fell sharply in the first half of the year following the imposition of tariffs, official data showed on Monday, but the loss was offset by increased sales to China.

The EU in January imposed tariffs for three years on rice from Cambodia and Myanmar, aiming to protect EU producers such as Italy following a surge in imports from the two Asian countries.

For the first six months, rice exports to the EU fell 32 percent from the same period last year to 93,503 tonnes, according to data from the Secretariat of One Window Service for Rice Export Formality, a joint private-government working group.

However, rice exports to China rose 66 percent over the same period to 118,401 tonnes, while total rice exports rose 3.7 percent to 281,538 tonnes, with Australia emerging as a new market.

Kann Kunthy, vice president, of Amru Rice (Cambodia) Co Ltd, which exports the grain to foreign countries, said that the EU tariffs meant Cambodian long grain white rice was no longer competitive.

“Exports to the EU have declined after the safeguard measure so China and other new markets, especially Australia, are picking up,” Kunthy told Reuters.

“Losing a market is never good, but the good thing is that we find other markets,” he added.

Kunthy said Amru had concluded a deal with an Australian rice importer and anticipated annual exports of about 20,000 tonnes. Sales to Australia reached 8,035 tonnes in the first half of this year.

Under a trade program known as Everything But Arms (EBA), all Cambodian exports to the EU are duty free except arms. The block accounts for more than a third of Cambodia’s exports, including garments, footwear and bicycles.

However, in February the EU started an 18-month process that could lead to a suspension of Cambodia’s EBA status over its record on human rights and democracy.

In April, Cambodian Prime Minister Hun Sen said China will help Cambodia if the EU withdraws the EBA. China had also agreed to import 400,000 tonnes of Cambodian rice, according to Hun Sen’s Facebook page.

Reporting by Prak Chan Thul; editing by Richard Pullin