Ministry Scraps Rice Inspection Fee

KHMER TIMES
CHEA VANNAK

The price of Cambodia’s rice is higher than other rice exporting countries. KT/Chor Sokunthea

The government has removed the fee for inspection services on milled rice slated for export, aiming to reduce the cost of Cambodia’s rice and increase its competitiveness in international markets.

The $6.25 shipment inspection service fee was scrapped late last month, according to a statement from the Commerce Ministry released on December 22.

Most shipping containers for rice hold between 500 tons and 1,000 tons.

Soeung Sophary, spokesperson for the Commerce Ministry, said yesterday that the removal of the fee will help reduce the cost of logistics for Cambodian rice and bring the selling price down in other countries.

“It will help reduce the cost of exports because our milled rice selling in markets is more expensive than others compared to neighboring rice producing countries, so we removed the checking service fee,” she said.

Camcontrol, the government body in charge of the inspections, will still pore over milled rice due to be exported, Ms. Sophary added.

The price of Cambodia’s milled rice is higher than other rice exporting countries in international markets. Experts say the cost of electricity, fertilizers, petroleum and poor logistics systems all factor in to Cambodia’s high rice prices.

The government has made an effort to lower the cost of rice in international markets in a number of ways, reducing the price of containers from $10 to $5 last year.

Song Saron, CEO of Amru Rice, applauded the move, saying it will bring the price of Cambodia’s milled rice down.

“It is the removal of a barrier which is a positive step in reducing all both official and unofficial expenditures, because sometimes 25,000 riel is the real payment, but in fact, the real expenses may be higher than this,” Mr. Saron said.

However, he told Khmer Times that the cost of milled rice will only go down significantly when the government looks into the entire production process and reduces the price of agricultural fertilizer and electricity.

Last year, Cambodia exported 542,144 tons of milled rice, a 0.7 percent increase compared to the year before. China was the largest market for Cambodia's milled rice in 2016, importing nearly 130,000 tons. They were followed by France, which imported 78,329 tons and Poland, which brought in 64,035 tons.

Hun Lak, vice president of the Cambodia Rice Federation, said that the fall in milled rice exports was expected.

“We already predicted that rice exports would fall sharply in 2016. There were external factors beyond our control,” he told Khmer Times.

In the first quarter of last year, a severe drought affected rice production and through the year rice millers had been complaining of the flow of low-grade cheaper rice into the country from Vietnam.

Last March, rice millers and exporters wrote to the government urging intervention due to stiff competition in export markets as well as domestic ones. In the letter, they said they were facing a cash crunch due to a flood of low-grade rice from Vietnam. In late September, the government responded by making out a $27 million loan to rice millers to purchase paddy rice from farmers, in a bid to prevent rice prices from falling further.