Kingdom’s tobacco industry undergoes decrease last year
Phnom Penh: Cambodia’s tobacco industry saw a decrease in cultivation last year, despite the Kingdom being granted duty-free and quota-free exports of tobacco leaves to Vietnam, according to Ministry of Agriculture, Forestry and Fisheries data.
Cambodia produced 7,454 tonnes of tobacco last season, an 18 per cent decrease from the previous season’s 9,089 tonnes, while cultivation fell 16 per cent to 5,743ha nationwide from 6,859ha.
Tbong Khmum province is the Kingdom’s largest producer of tobacco.
Sum Ra, Kroch Chhmar district’s Agriculture office chief in Tbong Khmum province, said tobacco cultivation has seen a decrease in the last few years due to market fluctuation.
“Tobacco cultivation is not much of a challenge, it is easy to grow along the river,” he said.
“Tobacco cultivation increases and decreases depending on market fluctuations. Farmers will alternate with corn if the tobacco market is not good.”
Ministry of Commerce spokesman Seang Thay on Monday said Cambodia still enjoys preferential duty-free market access to Vietnam for agricultural products, which includes tobacco.
In 2016, Cambodia and Vietnam signed a memorandum of understanding (MoU) granting preferential tariff treatment for agricultural products crossing their shared border. Under the agreement, the Kingdom was allowed to export 3,000 tonnes of dried tobacco to Vietnam duty-free for one year starting in 2016.
Ministry of Commerce data shows the Kingdom exported a total of 1,200 tonnes of tobacco to Vietnam in 2017, worth $2.37 million, a 24 per cent increase from 2016. In 2016, 989.75 tonnes were exported, valued at $1.91 million.
“The MoU with Vietnam brings a potential market for exporters and also for farmers as they save on tariff costs and increase product value,” he said. “Farmers cannot export to Vietnam directly but a sustainable market will ensure [stable] prices for them.”
Besides exports, farmers supply tobacco to Cambodia-based British American Tobacco (Cambodia) Limited under a “contract farming” system, a system offering tobacco farmers more security than selling to Vietnam.
Khun Bochheang, a tobacco farmer with 10ha of land in Kroch Chhmar district, said it is currently tobacco leaf harvesting season and prices would be known next month.
He said he sold his dried leaf stock at $2 per kg last year.
“We’ve never heard of any new market from Vietnam, we sell only to tobacco factories. However, we have no idea yet how much we’ll be able to sell [the tobacco] for next,” he said, adding that sales will begin at the end of this month and last throughout April.