BANGKOK (NNT) - The Regional Comprehensive Economic Partnership (RCEP), the world’s largest free-trade agreement (FTA), came into force on January 1, 2022. To ensure that Thailand benefits from the mega-FTA, the third phase of a special lending campaign for SMEs has commenced to facilitate exports to RCEP countries.

Under the campaign, the Export-Import Bank of Thailand (EXIM Bank) has allocated 3 billion baht to issue loans to SMEs, micro SMEs and community enterprises. To be eligible, a business must be looking to export products to the RCEP market. A special interest rate of 2.75% will apply for the first year of the loan, after which the rate will be 5.75%. Each business can borrow no more than 50 million baht and each borrowing application will be completely processed within 7 days. The Thai Credit Guarantee Corporation (TCG) will guarantee each loan.

Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said Thailand was among the core nations that pushed for the RCEP agreement. RCEP mandates that import tariffs among member countries be slashed to zero for 39,366 items. Although this currently only applies in 11 countries, Thai businesses have already made use of the export benefits granted by RCEP. Such export gains under RCEP are already valued in the hundreds of millions of baht.

According to Jurin, RCEP members Malaysia, Indonesia, Philippines and Myanmar are formalizing the tariff waivers, which are expected to be observed by all 15 RCEP member nations by March of this year.

Businesses that would like to participate in the lending campaign for SMEs exporting to RCEP countries can contact any branch of EXIM Bank.

Source : National News Bureau of Thailand (NNT)

A Czech Republic-based private company has signed a contract to buy 35 tonnes of Kampot peppercorn from more than 200 households of the Kampot Pepper Promotion Association (KPPA) over a period of 10 years.

KPPA president Nguon Lay told The Post on March 8 that EU Land and Pepper Investment Co Ltd was the eighth company to sign a direct agreement with the families, and has pledged to buy at least 35 tonnes of Kampot peppercorn – which is protected by Geographical Indication (GI) regulation.

The company previously purchased the GI-tagged pepper from the association’s families in 2021, he said, but did not have a direct contract, being one of 30 companies exporting pepper overseas.

Lay noted that at present, the Ukraine conflict has not affected the export of Kampot pepper. Nonetheless, the contract with the Czech-registered company includes force majeure, stating that the company will reduce purchases from farmers if the fighting were to impact the European market.

“This year, EU Land and Pepper Investment Co Ltd has signed a contract with 200 households to purchase 35 tonnes or more. As long as the farmers can produce it, then they will buy it all,” said Lay.

He added that the company has been encouraging the families to grow organic pepper specifically.

Tep Yoeun, one of the farmers involved in the latest deal, told The Post that, after signing the contract with the Czech-based company, he and other farmers are now planning to increase their cultivation of pepper.

He added that the company has “given a lot of confidence” to farmers, citing its promise to buy all three types of peppercorn that they are growing – and as much of it as they can produce.

Yoeun said: “As farmers, we are very happy growing pepper. It is marketed and sold at high prices, too – the company bought it from us at the price of a kilogramme of black pepper at $15, red pepper at $25, and white pepper at $28, which has made us a lot of money.”

For full article, please read here

Author: Hom Phanet 

Source: The Phnom Penh Post 

The government has drafted official roadmaps for the development of the automotive and electronics sectors in Cambodia, to create more than 22,000 new jobs and raise exports past $2 billion over the next five years.

The draft roadmaps purport to accelerate investment in the sectors towards the reskilling and upskilling of workers, develop electricity and logistics infrastructure, improve cost-competitiveness in manufacturing, build a more effective customs and trade facilitation regime to ratchet up international trade, among other things.

The instruments are the result of joint efforts by the Council for the Development of Cambodia (CDC) and seven ministries, initiated in February 2021, according to a CDC statement.

Development of the instruments was led by the CDC, with support from the UK government’s Accelerated Covid-19 Economic Support (ACES) programme and in partnership with the Boston Consulting Group (BCG), the statement said.

The ministries involved in the process were those for finance, land management, industry, commerce, labour, energy, and public works.

CDC secretary-general Sok Chenda Sophea said the drafting of the document “represents a commitment” by the government to ensure the effectiveness and comprehensiveness of the contained strategies, directions and mechanisms in drawing investment into the automotive and electronics sectors and increase the cost-competitiveness of their operations.

The CDC chief was speaking at a March 1 discussion on the roadmaps with British ambassador Tina Redshaw, industry stakeholders and other private sector partners.

“Cooperation with the private sector is essential to the development of these sectors, from the development of joint strategies, to the introduction and implementation of action plans, with an aim of gathering additional input,” the statement quoted him as
saying.

The British ambassador underscored the huge potential opportunities for the Kingdom in the automotive and electronics sectors.

“The UK is proud to support the development of these sector roadmaps, as well as Cambodia’s broader efforts to recover from the Covid-19 pandemic, transform its economy, and create more resilient and better-paying jobs for Cambodians,” Redshaw said in a joint press release.

For full article, please read here

Author: Hom Phanet

Source: The Phnom Penh Post 

The Bank of Thailand (BoT) left its key interest rate unchanged as the Monetary Policy Committee (MPC), announced today that the MPC voted unanimously to maintain the policy rate at 0.50 percent.

The Committee assessed that the Thai economy in 2021 would expand faster than previously projected, and the recovery would continue into 2022 driven by higher merchandise exports, as well as a higher number of foreign tourist arrivals due to faster-than-expected relaxation of travel restrictions.

However, the recovery would remain fragile and uneven across sectors, especially in tourism which was below pre-pandemic levels. The Committee would monitor developments of the labor market as well as the impact of higher living costs given that income had not fully recovered.

Headline inflation in 2022 would be higher than previously assessed and could exceed the target range in the early part of the year. This would be owing to price increases in certain sectors, especially energy and raw food products. Meanwhile, upside risks to inflation increased. In particular, cost pass-through from producers to consumer prices could increase if energy and raw food prices remain elevated for longer than expected, or if the supply constraint problems broaden into other goods. 

The Committee viewed that the continued accommodative monetary policy would help support economic growth, and thus voted to maintain the policy rate. In addition, the ongoing financial and fiscal measures, with the focus on rebuilding and enhancing potential growth, would play an important part in bolstering the robust recovery of the labor market as well as the income of businesses and households.

Source : Thailand Business News

In the first two months of 2022, Cambodia exported more than 1 million tons of agricultural products to more than 50 countries, which is an increase of 9.51 percent compared to the same period last year.

This is according to the report of the Minister of Agriculture, Forestry and Fisheries, Veng Sakhon.

The report stated the country has exported a total of 1,835,475 tons of agricultural products to 52 countries. According to the numbers, this is an increase 159,331 tons of products which is equal to an increase of 9.51 percent compared to January and February 2021.

The main agricultural products export is rice. The country exported 103,058 tons, which is an increase of 26,836 tons or 35.21 percent compared to the export volume in the first two months of 2021.

Cambodia exported 26,507 tons of rice to 20 EU destinations, an increase of 35.54 percent compared to last year. The country also exported 56,385 tons of rice to China, which is an increase 49.84 percent. Cambodia exported 3,141 tons of rice to three ASEAN destinations. The country also exports rice to 16 other destinations.

Local media reported that there are 41 companies in Cambodia that are currently exporting rice. The 10 largest companies have collectively exported 77,039 tons, while the other 31 companies have collectively exported 26,019 tons of rice.

For original article, please read here

Author: Khmer Times 

Source: Khmer Times 

The Thailand Board of Investment (BOI) announced that the combined value of foreign and local applications for investment promotion in 2021 totaled 642.7 billion baht (ca. US$19.5 billion), an increase of 59%, boosted mainly by foreign direct investments (FDI) in tech sectors and a continued increase in the value and number of projects in Bio-Circular-Green (BCG) industries, as well as the continued buildup of the power generation sector.

“Investment applications in BCG activities are continuously increasing as investors take advantage of the promotion measures that we have issued to help Thailand’s economy and companies operating here to prepare for the changing consumer demand and supply chains in the post-Covid-19 world,” BOI Secretary General Ms. Duangjai Asawachintachit told reporters.

As for FDI, we are seeing constant growth in foreign investments in target sectors such as smart electronics, specialty chemicals, bioplastics and the medical cluster.

BOI Secretary General Ms. Duangjai Asawachintachit

Electrics and electronics top the list

Electrics and electronics once again topped the list of target sectors which attracted the most applications with 104.5 billion baht in value, reflecting the soaring demand for electronics devices and parts, followed by the medical sector with 62.2 billion baht, petrochemicals and chemicals with 48.4 billion baht, agriculture and food processing with 47.7 billion baht, and automotive and parts with 24.6 billion baht.

Japan remains first country source

Japan once again topped the list of FDI source countries with a combined investment value of 80.7 billion baht for 178 projects, followed by China with 38.6 billion baht in investment pledges for 112 projects, and Singapore with 29.7 billion baht for 96 projects.

The top three sectors for FDI applications were electrics and electronics, petrochemicals and chemicals, and the medical cluster.

In terms of regions, the Eastern Economic Corridor (EEC), Thailand’s prime industrial area comprising Chonburi, Chachoengsao, and Rayong, attracted the most applications with 220.5 billion baht, an increase of 34% from 2020.

Additional Measures to Support Bio-Hub

Additional measures aimed at supporting the bioeconomy include two new businesses to be incorporated in the BOI list of activities eligible for incentives: namely “Digital Trading Platform for Agricultural Products” and “Agri-Food Industrial Estates/Parks”.

Both new activities will be eligible for tax benefits for 5 years.

The approved package also includes improved benefits and conditions for businesses involved in the production of extracts from natural raw materials and products using those extracts.

Source Thailand Business News

Cambodia exported nearly 2.073 million tonnes of agricultural products in the first two months of 2022, up by over 6.4 per cent year-on-year from more than 1.947 million tonnes, according to Minister of Agriculture, Forestry and Fisheries Veng Sakhon.

By category, milled rice amounted to 103,058 tonnes, surging by 26,836 tonnes (35.21 per cent) year-on-year, while paddy clocked in at 651,101 tonnes, climbing by 92,068 tonnes (16.47 per cent) year-on-year, Sakhon said in a statement, citing data from the National Phytosanitary Database.

“Other agricultural products besides paddy and milled rice” weighed in at 1,318,642.70 tonnes, up by 0.50 per cent year-on-year, said the statement, posted on the minister’s Facebook page.

The Kingdom’s agricultural exports from January-February were shipped to a total of 52 countries and territories, including markets in Europe, ASEAN and elsewhere in Asia, the statement added. 

The minister told The Post on March 1 that Cambodia’s agricultural exports over the period were driven up by an increase in both market demand and production by farmers.

“Given the current circumstances, some countries cannot produce, but Cambodia can – others have high demand for agricultural products.

“As of late, people in a number of countries have been switching out crops and trying new ones for more profitable means. And, Cambodia has a favourable climate – all of these factor into the upswing in agricultural exports seen over the two months,” Sakhon said.

For full article, please read here

Author: Hom Phanet 

Source: The Phnom Penh Post 

In the Lao PDR, fruits, vegetables and plant products have significant export potential to the European Union (EU), the Association of Southeast Asian Nations and China.

The EU in particular, accounted for €63 million worth of agricultural exports from the Lao PDR in 2019, representing 22.1% of total trade. Not only do these exports contribute to the country’s economic growth, but they also foster domestic employment in one of the key sectors in the country.

The International Trade Centre’s (ITC) analysis indicates that speciality agriculture from Lao PDR has significant export potential, up to US$634 million. However, agriculture and food-related products are among the most regulated sectors in international trade. Consumers in importing countries expect products that are safe for human health, and at the same time, safe for animals, plants, and the environment.

To ensure food safety and meet the regulatory framework for the control of plant health and pesticide residues in fruits and vegetables, the International Trade Centre’s Systematic Mechanism for Safer Trade (SYMST) project improves food safety and plant health through better governance in the Lao PDR. [Read more...]

Source: Lao News Agency

Cambodia ranked third in both real income gains and export growth among Regional Comprehensive Economic Partnership (RCEP) members, according to the World Bank (WB).

In its recent working paper entitled “Estimating the Economic and Distributional Impacts of the Regional Comprehensive Economic Partnership”, the Washington-based lender said the Kingdom came in third after Vietnam and Malaysia, in terms of real income gains.

On export growth, the report said Cambodia was expected to log a rise of 6.5 per cent, the highest after Vietnam and Japan at 11.4 per cent and 8.9 per cent, respectively, the 46-page research paper said.

The RCEP is the world’s largest trade pact, signed on November 15, 2020 by the 10 ASEAN countries and five other Asia-Pacific countries – Australia, China, Japan, New Zealand and South Korea – and entering into force in Cambodia on January 1, 2022.

Ratification is still pending in South Korea and four ASEAN countries – Indonesia, Malaysia, Myanmar and the Philippines.

The working paper said the deal has the potential to lift 27 million additional people to middle-class status by 2035.

“Considering the full scenario, with reductions in tariffs, non-tariff measures, and trade costs, Lao PDR, Thailand, Cambodia, Vietnam and Malaysia benefit the most. These positive gains are magnified when a productivity kick is assumed.

“Under this scenario, the real income in Vietnam and Malaysia increases almost five per cent. In Japan, the country that gains less under this scenario, the real income increases by 0.5 per cent.

“Interestingly for Japan, the impact of the four RCEP scenarios is similar, which suggests that most gains are associated with a fall in tariffs, in contrast to the rest of the countries, where the fall in tariffs leads to very small impacts, or even a negative impact as in Cambodia and Vietnam.

For full article, please read here

Author: May Kunmakara

Source: The Phnom Penh Post