as of September 2, 2024:

Status and Prospects of Ukraine's Cooperation with Cambodia in the Agricultural and Food Security Sectors

Ukraine and Cambodia have significant potential for deepening cooperation in the agricultural sector (agro-industrial complex), which is a strategically important sector for both countries. Due to diverse climatic conditions, soil types, and consumption specifics, the products grown in Ukraine and Cambodia differ substantially. This creates significant opportunities for mutual trade, as each country can offer unique products that are in demand in the other country’s market. Such trade exchange will help diversify supplies, meet consumer needs, and enhance food security in both countries.

State of Cambodia's Agricultural Sector:

Agriculture is a vital component of Cambodia's economy, providing employment for a significant portion of the population—about 35%. However, according to a forecast by the Ministry of Labour and Vocational Training, the number of people employed in the agricultural sector will decrease to 27.5% by 2025, while employment in the industrial sector and services will increase.

According to the Ministry of Agriculture, Forestry, and Fisheries, in 2023, the agricultural sector accounted for about 22% of Cambodia's GDP. Crop production made up 57.1% of the agro-sector, fisheries 24.8%, livestock 11.2%, and forestry 7%.

The main agricultural crops in Cambodia are rice, which occupies about 80% of arable land, as well as maize, cassava, soybeans, and sugarcane.

Exports:

In the first half of 2024, Cambodia exported over 6.13 million tons of agricultural products, a 57% increase compared to the same period in 2023, amounting to 2.8 billion USD. The main export products were polished rice, unpolished rice, fresh and dried cassava, cashew nuts, maize, fresh longan, mango, and pepper.

Exports were directed to 80 countries. However, more than 90% of Cambodia's agricultural products go to key markets such as:

China: bananas, rice, cassava, mango, and lentils

Vietnam: cashew nuts, cassava, fresh mango

Thailand: cassava, fresh mango, pepper, bran.

The growth in exports was also driven by government support, which exempted agricultural products from additional taxes. In recent years, the Cambodian government has made efforts to modernize the agricultural sector by introducing new technologies, improving irrigation systems, and enhancing seed quality.

Imports:

Most of the agricultural products imported into Cambodia come from neighboring countries such as China, Vietnam, Thailand, Indonesia, and Malaysia. The main imported goods include vegetables, fruits, fish, meat, and other products. To meet domestic market needs, more than 50% of vegetables are imported from abroad, mainly from Vietnam and Thailand.

Additionally, Cambodia imports wood products and charcoal, residues and waste from the food industry, fertilizers, and raw materials for leather production, such as hides and fur. The demand for these goods remains high, and imports continue to grow.

Status of Cooperation between Ukraine and Cambodia:

Although trade between Ukraine and Cambodia remains at a low level, it shows steady growth. In 2023, the trade volume between the two countries amounted to 27.1 million USD, a 79% increase compared to the previous year: Ukrainian exports were 0.5 million USD, and imports 26.6 million USD. In the first seven months of 2024, trade between Ukraine and the Kingdom of Cambodia grew to 26 million USD, of which only 1.6 million USD was Ukrainian exports.

However, trade in agricultural goods is almost absent. In the first seven months of 2024, Ukraine imported only small quantities of rice from Cambodia. Meanwhile, Cambodia imported raw materials for fur production, veneer sheets, plywood, and sunflower oil from Ukraine.

The weak trade ties are mainly due to the distance between the countries, high logistics costs, and significant competition in the region.

There are no signed agreements between Ukraine and Cambodia on cooperation in agriculture.

Promising Areas for Ukrainian Exports:

• Fertilizers: 

Fertilizer use in the country has increased from 38,693 tons in 2005 to 134,053 tons in 2019, with almost no domestic fertilizer production in Cambodia. Given the continuous growth in import volumes, Ukraine has the opportunity to expand fertilizer exports to Cambodia, particularly chemical and organic fertilizers, meeting the needs of the local market.

• Agricultural Machinery and Technologies:

The Cambodian government aims to introduce the latest technologies in the agricultural sector, opening opportunities for Ukrainian manufacturers of agricultural machinery and technologies. The low level of automation in Cambodia's agro-industrial complex creates favorable conditions for the supply of modern equipment and innovative solutions from Ukraine.

• Wheat:

Cambodia imports wheat mainly from Vietnam, which, in turn, imports it from Brazil, Australia, and Ukraine. Ukrainian exporters have the opportunity to organize direct wheat supplies to Cambodia, avoiding unnecessary re-export costs through Vietnam.

• Animal Feed:

Cambodia imports nearly 50% of its animal feed due to the high cost of local production. The annual import volume of animal feed and livestock products ranges from 250 to 300 million USD, most of which comes from Vietnam. Given the demand for feed and high energy costs for its production in Cambodia, Ukraine has the opportunity to capture a market share by supplying high-quality and competitive animal feed.

Food Security:

Ukraine could consider Cambodia as a potential recipient under the "Grain from Ukraine" initiative, given the existing food security challenges in the country. Despite significant improvements in the food situation in recent years due to rising real incomes and increased production of rice and other crops, the COVID-19 pandemic has negatively impacted Cambodia's economy. Malnutrition remains a serious issue among the most vulnerable groups, such as people with special needs, ethnic minorities, and residents of remote areas. According to a recent UN report, about 2.5 million Cambodians—approximately 15% of the population—suffer from severe food shortages. Cambodia also ranks low in global food security indices: 78th out of 113 in the Food Security Index 2022 and 67th out of 109 in the Global Hunger Index 2023. These factors indicate the appropriateness of cooperation to enhance food security in the country.

Cooperation between Ukraine and Cambodia in the agricultural and food security sectors has significant potential for development. Joint efforts aimed at expanding trade, investments, and technology exchange can contribute to improving food security and economic development in both countries.