Exports to South Korea soar as rubber begins to take off

via CAAI News Media

Friday, 26 February 2010 15:04 May Kunmakara

January’s 391pc rise in exports suggests exports are evolving

CAMBODIAN exports to South Korea surged 391 percent in January compared with the same month last year to US$4.33 million amid an overall rise in bilateral trade between the two countries, Korea Trade-Investment Promotion Agency (KOTRA) figures showed Thursday.

Total trade was up 77 percent to $27.715 million. Imports from South Korea climbed 58.2 percent to $23.39 million as economic activity rebounded from the very low base at the start of 2009, when the economic crisis was at its height in the Kingdom. Last January, trade between the two countries declined 20 percent.

Korea Chamber of Commerce in Cambodia Chairman Nam Shik-kang told the Post Thursday that rising demand from North America – Cambodia’s main export market – likely helped spur the recovery in trade.

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We have an opportunity to raise exports, but also investment and tourism.

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South Korea runs garment factories in the Kingdom, and Cambodia in turn imports raw materials for its primary export industry, so trade between the two is highly dependent on demand from the United States and Canada.

KOTRA figures showed that dye was the main, and thread the third-biggest South Korean export to the Kingdom.

In turn, knitwear and textiles were the fourth- and sixth-largest Cambodian exports last month.

Natural rubber was by far Cambodia’s biggest export to South Korea last month, accounting for more than 50 percent of total bilateral exports at $2.357 million, a sign that the Kingdom is beginning to branch out in terms of export industries, particularly into agricultural products.

Cambodia is aiming to more than double land under rubber cultivation to 250,000 tonnes within the next five years as Vietnamese companies snap up land concessions, particularly in the east of the country.

Vietnamese firms Viet Loa, Dong Phu Snoul and Rubber Kontum are set to receive 21,000 hectares of economic land concessions for rubber plantations, it was announced in an annual industry meeting on February 10, the latest in a series of awards to companies from across the border investing in rubber in Cambodia.

Nam Shik-kang said Thursday he expected bilateral trade to rise 20 percent this year after declining 5.51 percent in 2009, although he said that logistical and electricity costs in Cambodia are “too expensive compared to neighbouring countries”. Cambodian exports rose 26.6 percent last year while imports from South Korea dropped 7 percent.

Neou Seiha, a senior researcher at the Economic Institute of Cambodia, said Thursday that Cambodia needs to correct the persistent trade imbalance with South Korea – a trade relationship Cambodia suffers with most countries in Asia – by competing in its free market.

“We have an opportunity to raise exports [to South Korea], but also investment and tourism” from the country, he said.

South Korea is the second-largest source of visitors to the Kingdom, behind Vietnam, according to Ministry of Tourism figures, although before the downturn it had been the top source.

South Korea saw overall imports overtake exports for the first time in a year in January as energy imports soared due to cold weather, according to figures released Thursday from Seoul.