In less than a week, the European Union will decide on whether or not to impose tariffs on rice from Cambodia and Myanmar, with local exporters saying the uncertainty is already costing them business.
On Jan 15 the European Commission will make a decision on the activation of a safeguard clause that will tax Cambodian rice exports $199.5 per ton during the first year.
In March, the EC launched an investigation to see if imports of semi-milled and milled Indica rice from Cambodia and Myanmar resulted in serious difficulties to EU producers of similar or competing products.
On December 4, a vote on whether to impose tariffs on Cambodian and Burmese rice was held, with EU members failing to come to a consensus. As a result, the EC was tasked with issuing a final decision on the subject by Jan 15.
The written procedure to activate the tariffs began yesterday, according to a press released last week by Confagricoltura, an organisation that represents Italian agricultural businesses.
“The countdown to the decision on imposing duties on rice from Cambodia and Myanmar has begun,” Confagricoltura said.
“Today, the written procedure begins in Brussels. Unless there is an exceptional development, the procedure will close on January 15 with the launch of the regulation,” it said.
Confagricoltura president Massimiliano Giansanti said the regulation is of utmost importance for the future of the rice sectors in Italy and in Europe as a whole.
He said rice exports from Cambodia and Myanmar have increased from 27,000 tonnes to 300,000 tonnes in the last five years, which is affecting European rice producers.
EC’s draft implementing regulation provides for the reintroduction of duties on imports of rice from Cambodia and Myanmar over the next three years: 175 euros ($199.5) per ton during the first year, 150 euros ($171) in the second year, and 125 euros ($142.5) in the last.
Chan Sokheang, chairman and CEO of local rice exporter Signatures of Asia, told Khmer Times that the decision is likely to be postponed which will generate even more uncertainty for Cambodian exporters.
“The uncertainty EC is creating is making it hard to find a solution. If we had an answer already, we could find a solution working with the buyers,” Mr Sokheang said.
He said the lack of clarity is causing the delays of shipments, with buyers reluctant to go ahead with exchanges.
“Due to this uncertainty, buyers are delaying shipments. They are waiting for EC’s decision,” he said, adding that, “If the EU activates the tariffs, many buyers will cancel their orders and our rice sector will be hurt.”
He said 70 percent of shipments to the EU are already behind schedule because of this issue. “About 1,000 tonnes of rice are waiting in the docks to be shipped.”
Mr Sokheang asked EU officials to consider the situation carefully before making a decision.
“Please, do not take politics into consideration when making this decision. Please let Cambodia first graduate from a least developed economy, which should happen in the next five years.”