Trade with Hong Kong dismal up to end of Q3

Containers sit beside Victoria Harbour in Hong Kong. Cambodian trade with the territory has suffered this year as the Kingdom has imported less telecommunications equipment and raw materials. BLOOMBERG

(Posted by CAAI News Media)

Monday, 16 November 2009 15:01 May Kunmakara

Data shows bilateral trade fell nearly 25 percent up to end of September, but Cambodia increases garment exports to SAR

BILATERAL trade between Cambodia and Hong Kong fell 24.6 percent year on year in the first nine months of 2009 to US$364 million, figures released Friday by the Hong Kong Trade Development Council (HKTDC) show.

Cambodia’s exports to the Chinese special autonomous region grew 37.7 percent over the period, but accounted for just 2.9 percent of trade between the two countries at $10.7 million.

Although imports from Hong Kong fell 25.6 percent over the nine months, the Kingdom was still left with a $342.6 million trade deficit.

Most trade between the two countries consisted of re-exports. Around half of Cambodia’s exports to Hong Kong were re-exported, and just $16.1 million worth of goods imported from Hong Kong were actually produced there.

HKTDC Indochina Director Tina Phan said by email Friday that there was plenty of scope for Cambodian producers to use Hong Kong as an export base for their products.

“Cambodian companies can use the Hong Kong platform to further export their products to both Hong Kong and to other markets,” she said. “This we have not seen much" to date.

The downturn in trade volumes was largely a result of the “challenging” external environment since the fourth quarter of 2008, Phan added.

“Total trade with Cambodia slowed due to a downsizing of orders from overseas, mainly from the United States and European Union, both of which have been affected by the financial crash,” she said.

Aside from telecommunications parts and equipment, the bulk of Cambodia’s imports from Hong Kong are raw materials for its garment sector, which has been hit hard by falling consumer demand in the US and EU. Cambodia’s garment exports fell 21.66 percent over the first nine months of the year to $1.78 billion, Ministry of Commerce figures released last week show.

Cambodia’s imports of raw materials from Hong Kong have fallen in line with the downturn. Imports of knitted or crocheted fabrics, which account for almost a third of Hong Kong’s exports to the Kingdom, declined 36.6 percent over the period to $112.1 million. Woven cotton fabrics, representing 12.9 percent of exports, fell 30.8 percent, and textile yarn (7.3 percent of the total) fell 30.4 percent.

Cambodia’s imports of telecommunications parts and equipment from Hong Kong were down 16 percent over the period to $38 million, representing 10.8 percent of all imports. Tobacco imports were up 27.8 percent to $4.9 million.

Commerce Ministry Secretary of State Ok Boung said Cambodia’s exports to Hong Kong were dominated by exports of textiles and garment products from Hong Kong-owned factories.

More garments exported

Cambodia’s garment and textile exports to Hong Kong, which represent around 85 percent of the total, were up in all categories over the period.

Exports of processed crustaceans, molluscs and other aquatic invertebrates fell 10.2 percent to just over $1 million, representing 9.7 percent of total exports. Exports of fresh, chilled and frozen fish climbed 106.9 percent to $234,000.

From 1999 to 2008, Hong Kong’s exports of consumer goods to Cambodia grew at an average annual rate of 17.3 percent while its exports to ASEAN as a whole grew 6.7 percent, HKDTC figures show.

In 2008, Hong Kong exports of consumer goods to ASEAN totalled $5 billion, about 22 percent of Hong Kong’s total exports to the region.