China Government holds a $300 million loan to a Cambodian rice project, aimed to develop storage and warehousing facilities in the country in view of Cambodia government has not been able to meet the criteria set by the Chinese authorities as quoted by officials associated with the project.
According to a report, in December last year, Cambodia’s Ministry of Economy and Finance sent a draft MoU to the Chinese government seeking a loan of about $300 million to build and develop about 10 rice warehouses in their country, which can store a total of 1.2 million tons of paddy/rice, in the country to ensure smooth supplies of rice to millers as well as to the exporters.
According to the Supreme National Economic Council (SNEC) which is taking care of the project informed that the loan has been put on hold as Cambodia has not responded to the Chinese requirements on the loan. There are some technical problems and now both the parties are negotiating and looking at their own benefits.
In this issue, the Cambodian Rice Federation (CRF) have been stressing the need for the development of rice storage and warehousing facilities in the country in order to boost their exports. It is also emphasizing to the government to provide adequate financing facilities to the millers and exporters to buy rice during the harvest season.
Further, it has been observed by the SNEC Senior Adviser that a that major quantity of Cambodian paddy/rice is exported to Vietnam and Thailand through unofficial channels during the harvest season as there is lack of proper storage facilities in the country. Thus, millers and exporters are facing severe shortages of paddy for milling during lean months of April and May.
According to a report, Cambodia has exported around 283,825 tons of milled rice in the first six months of 2015, up about 60% from around 177,928 tons exported during the same period last year, while the country exported around 387,000 tons in 2014. However, USDA estimates Cambodia to export 1.1 million tons of rice including exports to Vietnam and Thailand in 2015, up about 10% from an estimated 1 million tons in 2014.