Indonesia has agreed to revise a memorandum of understanding on rice trade between itself and Cambodia, committing to ordering 125,000 tonnes of rice a year from Cambodia for the next four years.

The decision was made during a bilateral meeting between Minister of Commerce Pan Sosak and Indonesian Deputy Minister of Foreign Affairs Pahala Nugraha Mansury, along with ministry leaders and delegations from relevant institutions on August 16.

During the meeting, Cambodia discussed with Indonesia the possibility of exporting rice to Indonesia through the signing of a memorandum of understanding on rice trade between the two countries.

The Cambodian side requested Indonesia to promote rice orders from Cambodia through government-to-government (G2G), business to business (B2B) rice trade mechanisms. Cambodia has encouraged Indonesian investors to invest in Cambodia in rice production and set up rice mills.

At the same time, the Cambodian side encouraged business meetings between the two countries through face-to-face meetings with all stakeholders to achieve the export of rice and other agricultural products to Indonesia.

In response, Indonesia agreed to buy 125,000 tonnes of rice from Cambodia, including 100,000 tonnes using Indonesian state-owned Bulog and Green Trade logistics, and another 25,000 tonnes as luxury rice between ID Food and the Cambodian Rice Federation (CRF).

The two sides agreed to establish mechanisms to facilitate communication and coordination in rice trade. The two sides will continue to discuss price and other conditions in the near future.

Secretary of State for the Ministry of Agriculture, Forestry and Fisheries, Yang Saing Koma, said that on average, Cambodian farmers can produce a total of 12 million tons of rice per year, making Cambodia the eighth largest exporter of rice in the world.

He said that Cambodia also has high potential to increase rice production on existing land and expand overseas rice markets through policies to deploy commune agriculture officials, build agricultural communities and link farmers' markets. He noted that the Royal Government's financing policy was given a budget of more than $100 million to solve market problems and maintain the balance of rice prices, the continued development of comprehensive irrigation and other related policies.

In the first seven months of 2023, Cambodia exported more than 360,000 tons of milled rice to international markets and more than 1.5 million tons of unmilled rice to 67 destinations, down 19.2% compared to the same period in 2022.