The USDA said Cambodia’s rice millers have shifted their attention to the expanding Chinese market in light of new rules in the European Union that have tightened the residue limit of tricyclazole on rice. Cambodian rice farmers commonly use tricyclazole to control rice blast fungus, but effective June 2017 the E.U. said it will implement a new threshold of tricyclazole residue for white rice — 0.01 mg per kg of paddy — and in December 2017 will implement a new tricyclazole residue level for fragrant rice — at 0.01 mg per kg.
“Amid rice millers’ concern of the E.U.’s potential ban on Cambodian rice that fails to meet the chemical residue threshold, the government of Cambodia is looking into substitute options and raising awareness of farmers on proper usage of fungicides,” the USDA said.
Cambodia exported a total of 542,144 tonnes of milled rice in 2016, up 0.7% from 2015. China was the largest destination, importing 127,460 tonnes, a figure that is forecast to grow to 200,000 in 2017, the USDA said. The increase in demand from China is expected to outpace the potential decline in demand from traditional E.U. buyers.
“Last December, China National Cereals, Oils, and Foodstuffs Corporation (COFCO) approved 18 Cambodian rice millers for exporting rice to China as part of an agreement signed between COFCO and the Cambodia Rice Federation (CRF),” the USDA said. “Additionally, the Ministry of Agriculture Fisheries and Forestry (MAFF) selected 28 rice millers who have demonstrated competence to meet the requirements for exporting rice into China. The CRF is urging the government to facilitate more access to the China market to offset potential decrease demand from E.U.
“The cross border rice trade is a vital pathway for Cambodia rice export into Thailand and Vietnam. However, Thailand’s reduction in stock and a production recovery this year show no signs of an increase in import demand. Meanwhile, the cross border trade with Vietnam is robust mostly because of strong demand for Cambodian rice to serve local Vietnamese consumers who prefer quality fragrant rice.”
Overall milled rice exports are forecast to increase 5% to 570,000 tonnes in 2017, and 8% to 615,000 tonnes in 2018, the USDA said.