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Five countries ink contract farming pact

Mar 28. 2012
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By Petchanet Pratruangkrai


China, Laos, Cambodia, Burma and Thailand yesterday agreed to increase trade among them through contract farming, with China set to buy 500,000 tonnes of smoked rubber and rubber sheets worth Bt56.8 billion from the other four countries.

In the first year of the 11-year contract, China will purchase rubber worth Bt2.4 billion.

The scheme comes under the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy, aimed at promoting social and economic cooperation between the private sectors and governments throughout the integrated Asean community. Some of the Bt500 billion budget will support the scheme.

Sam Key, representative of the Prominent Investment Enterprises of Cambodia, said the contract to supply rubber to China was a first for Cambodia, which has 1.28 million rai (204,800 hectares) of rubber plantations, of which 80 per cent has already been cut for liquid rubber.

By 2020, the country will have 300,000 hectares growing rubber trees, whose output will be directly exported to China. Cambodia still has rich areas for rubber plantations. The government will consider granting concessions to operate plantations for at least 70 years.

"It is a golden period for investment in the Kingdom of Cambodia," Sam Key said.

Champa Vongprachan, director of Vieng Kham Trading, said this agreement was part of the Laotian government’s agricultural development project. The contract will cover rubber plantations of 1.68 million rai.

Laos also has contracts to export farm goods including cassava, coffee, rice and herbs with a combined volume of 1.25 million tonnes year.

Laos will also open an Asean trading centre to serve intra-Asean trade and assist foreign investors in exploring business opportunities in the country.

Ten leading Thai companies have reached transaction and cooperation agreements with businesspeople from China’s Yunnan province worth US$4.16 billion (Bt128 billion).

The agreements come under the "China (Yunnan)-Thailand Trade and Investment Promotion" to create markets for a variety of merchandise such as instant coffee, phosphorus, diesel, fresh vegetables and organic fertiliser.

Some joint ventures and cooperation agreements were also sealed, including the setting up of an Asean steel-trading centre and the Rui Li International Industrial Park as well as barter trade contracts for vegetables, fruit and other farm goods in exchange for oil products from China.

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