VietNamNet Bridge - Vietnamese businesses are considering growing rice in Cambodia for export to the EU, since the country enjoys preferential policy in exporting farm produce to the market.

 


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Vietnamese businesses are considering growing rice in Cambodia for export to the EU

The director of a rice export company said it was not difficult to grow high quality rice and build a Vietnamese rice brand. But it was hard to find buyers. 

According to the Vietnam Food Association (VFA), Vietnam exports about 8 million tons of rice every year and China remains the biggest consumer.

Vietnam also sells rice to the Philippines, Indonesia and Malaysia in ASEAN, and markets such as Africa and South America.

The common characteristic of these markets is that they are easy to please and do not require high quality products.

There are two choices for the businesses. They can either set up husking and processing rice plants in Cambodia, or organize production in Cambodia for export.
Meanwhile, it is very difficult for Vietnamese businesses to penetrate the EU and US markets, which are more demanding.

“We always meet obstacles when trying to enter the EU,” director of a rice export company said.

However, Cambodian exporters can sell rice to the European market. The EU is the biggest consumer of Cambodian rice.

Why can Cambodia sell rice to the EU, while Vietnam, the second largest rice exporter in the world, cannot?

According to the Commercial Affairs Division of the Vietnamese Embassy in Cambodia, Cambodian businessmen can export rice to the EU because they can enjoy preferences.

Under the EBA initiative (Everything But Arms) applied by the EU to poor countries like Cambodia, all the goods, except arms, exported to the EU can enjoy a preferential tariff of zero percent. Cambodia has been taking full advantage of the policy to export rice to the EU since 2010.

A report found that since 2013, Cambodia has exported 400,000 tons of rice every year, 62 percent of which goes to the EU.

Nguyen Bao from the Vietnamese Embassy in Cambodia suggested that Vietnam should grow rice in Cambodia to export to the EU to enjoy the preferences.

He said Cambodia now needs $300 million worth of capital to invest in agriculture, which could be a great opportunity for Vietnamese businesses as this would help them access the EU market.

Thoi Bao Kinh Te Sai Gon quoted its sources as saying that some Vietnamese businesses are considering setting up their production and trade bases in Cambodia.

There are two choices for the businesses. They can either set up husking and processing rice plants in Cambodia, or organize production in Cambodia for export.

“We will have to ‘take a roundabout’. However, we will not have to worry about consumption,” the director of a business said.


TBKTSG