Rice Exports to EU Plummet After Tariffs

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Rice for sale in Phnom Penh. (Nat Sopheap/VOD)
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Rice exports to China have overtaken shipments to Europe this year after the E.U. imposed tariffs in January to protect its rice growers.

Exports to Europe fell 32 percent from nearly 177,000 to about 120,000 tons for the first eight months of the year, while exports to China grew 54 percent from about 86,000 to nearly 133,000 tons in the same period, the Cambodia Rice Federation said in a report released on Wednesday.

Lun Yeng, the federation’s secretary-general, said the E.U.’s tariffs were the main factor behind the fall in exports to Europe.

Though the rice tariffs were apolitical, Yeng said they were reason to be concerned about potentially losing duty-free access for other goods exported to the E.U. as the bloc considers withdrawing Cambodia’s access to the “Everything But Arms” trade scheme over human rights concerns.

Nevertheless, the loss had been made up by growth in exports from Cambodia to China thanks to the close relationship between the two governments, Yeng said.

“The part that has been lost was covered by China,” he said. “The total amount of exports is similar to last year because it was replaced by China’s market.”

However, Theng Savoeun, director of the Coalition of Cambodia Farmer Community, said he was concerned about the sustainability of exports to the Chinese market, particularly considering that China was itself a rice exporter.

“We don’t know that China will keep buying for the long term,” Savoeun said. “We cannot make that conclusion yet or forecast whether China will continue to buy.”

China itself also exports rice to the U.S. and E.U. markets, he said

Rice brokers were already putting downward pressure on prices because of the loss of E.U. exports, reducing farmers’ incomes, Savoeun added.

Last year, the E.U. was the biggest market for Cambodian rice exports, buying nearly 270,000 tons for a 43 percent share, according to the World Bank.

In January, the E.U. introduced duties on indica rice from Cambodia and Myanmar over three years — starting at 175 euros (about $200) per ton in 2019, and reducing the tariff by 25 euros (about $27) per ton in 2020, and again in 2021 — in a measure the bloc said was meant to safeguard European rice producers.

The E.U. had found its market share within the bloc dropped from 61 percent to 29 percent over five years, while cheaper rice imports from Cambodia and Myanmar jumped by 89 percent.

Total rice exports in the first half of the year, totaling about 281,000 tons, increased slightly at about 4 percent compared to the same period last year, according to government data on the rice federation’s website.

(Translated and edited from the original article on VOD Khmer)

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