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  • Cambodia is difficult to meet conditions in the deal with Vietnam

    Aug 28th, 2018

    Cambodia's cashew nut industry is still struggling to maintain a stable market as regional representatives say that dependence on local brokers is damaging to farmers. Chhiv Ngy, director of the Cashew Association in Kampong Thom province, said on August 27 that the association is still looking for reliable buyers to ensure a stable price. According to Chhiv Ngy, cashew prices are now fluctuating from brokers to brokers and many have bought for about $ 2.5 / kg.

    "The current price does not mean we're losing money, but we do not get much when prices depend on local brokers. We do not have cash reserves, "he said. The association has held discussions with more than 30 companies this year, from China, South Korea, the United States, Japan, Germany and India, but has not been able to make any deals so far. Cambodia and Vietnam signed an agreement earlier this year to significantly expand their exports of the country by 2028, although no specific plans were made to meet the target.

    The Cambodian Ministry of Agriculture and the Vietnam Cashew Association (Vinacas) signed a memorandum of understanding (MoU) to increase Cambodia's exports to 1 million tons by 2028.

    Cambodian rice exports were only 73,000 tonnes last year. Vinacas has also transferred a $ 66,000 grant to the Cambodian Ministry of Agriculture to increase production.

    Hean Vanhan, director general of the Cambodian General Agricultural Office, said officials are studying cultivation methods in Vietnam, but local farming practices have not yet started.

    "The MoU with Vietnam is the first step in the process. The Agriculture Department is examining the processing plants to add value to the product instead of exporting the raw material, "said Hean Vanhan.

    Recent figures from the Cambodian Ministry of Agriculture show that the total production of raw materials is 1 tonne per hectare. With this momentum, about one million hectares of land, roughly equivalent to the area of ​​Ratanakkiri Province, will need to be planned to meet the terms of the MoU.

    Cambodian factory manager Tep Lyhean, who discussed with the association, said it was difficult to meet the contract farming conditions because prices in the international market fluctuated. In addition, she added, ensuring a quality product from farmers is very difficult.

    "We want to buy cashew nuts directly from the farmers rather than the association because of its affordable price," she said. "We need to ensure the price and quality of cashew nuts because we have to compete on the international market, so it is difficult to do farming contracts."