China’s Rice Market up for Grabs Due to ‘Unsuitable’ Land

China’s contaminated agriculture sector and robust demand for rice has created a potentially lucrative opportunity for Cambodian ex­porters if they can better promote their produce to compete with re­gional rivals, experts said at a workshop on rice markets in Phnom Penh on Thursday.

Rapid urbanization and soil pollution in southern China has caused rice production to shift to the north, leaving a huge distance between the northeastern rice bowl and the ma­jor rice-consuming provinces clos­est to Cambodia, a report re­leased at the workshop by agriculture consultancy firm Agland In­vest­ment Services says.

“About 3 million hectares of land is now unsuitable for rice cultivation due to heavy contamination by poisonous heavy metals in soil and wa­ter,” the report says.

“The country‘s grain transportation system is not up to the challenge of cheaply moving rice from the north to buyers in the south…. This creates incentives for companies in the south to source rice from neighboring countries such as Thailand, Cambodia, and Viet­nam,” it says.

A country where about 60 percent of the 1.3 billion population re­lies on rice as their main source of carbohydrates, Chi­na is a massive market for ex­port­ers, though getting ac­cess to it is not easy.

“One of the most important things you have to grapple with in China is that the central government determines what rice is im­ported,” Geoff Bastin, chief economist at agriculture consultancy firm Foodworks Co. Ltd., told the workshop’s roughly 100 attendees.

“Beijing determines what rice is im­ported in terms of volume and who imports it by granting licenses,” Mr. Bastin said.

Although Vietnam is currently the biggest rice supplier to China—the country exported 1.2 million tons of rice compared to Cam­bo­dia’s 28,302 tons last year—most of China’s fragrant rice comes from Cambodia.

But in order to obtain a greater share of the Chinese market, speak­ers said, Cambodia must work to dispel the country’s notion that Cambodia’s rice is overpriced and of low quality.

“Official rice and trade missions are essential…to building strong supply relationships [with China],” said William Scott, vice president of Agland, which also hosted Thursday’s workshop.

Speaking on the sidelines of the workshop, Taro Ichiro, owner of lo­cal company QC Rice Mill, said Cam­bodia should appoint a trade rep­resentative who can secure ties be­tween the two countries.

“Of course, Cambodian rice is much better than Vietnam’s but Chi­na doesn’t know about our rice…. So a representative office should be set up to build the brand of Cam­bodian rice in China,” he said.

Hun Lak, vice president of the Cambodian Rice Federation, said China has given Cambodia the “green light” following an agreement last month between China’s state-owned China National Ce­re­als, Oils and Foodstuffs Corp., or Cof­co, and Cambodia to import 100,000 tons within a year.

“The 100,000 ton quota is a trial. They’ve given us the green light to see if we can commit,” he said.

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