Trade up as garments recover

Photo by: Uy Nousereimony
A Russian Market vendor displays a Cambodian-assembled garment yesterday in Phnom Penh. The garment sector is bouncing back as Cambodia's trade shows robust growth so far this year.

via Khmer NZ

Thursday, 22 July 2010 15:01 May Kunmakara

CAMBODIA’S combined imports and exports increased nearly 16 percent in first half this year, compared to 2009, Ministry of Commerce statistics released yesterday show.

The growth in trade was due to growing demand across the globe, according to experts, but some warned that the economic turnaround was still at a fragile stage.

“Trade should be increasing as a recovering global economy leads to rising consumption, especially as the Ministry of Commerce seeks to facilitate exports,” MoC Secretary of State Chan Nora said.

Total imports and exports were worth $3.168 billion during the first half of the year, up 16.19 percent from the same period last year, the commerce report showed.

Imports climbed over 18 percent to US$2.18 billion from $1.84 billion for the same period last year, while exports grew 13.14 percent to $1.5 billion – 70 percent of which were garments – from a base of $1.32 billion last year.

“The domestic garment and textile sector has improved, increasing our demand for raw materials to supply production,” Chan Nora said.

“Trade growth has been quite robust,” said Cambodian Economic Association president Chan Sophal. He said the rise was a direct indicator of Cambodia’s economic growth.

“The garment industry is clearly bouncing back after being hit by reduced demand from America last year, and the huge increase in rubber prices have contributed to the rise in export values,” he said.

However, some commentators said that despite the promising data, there was still a danger Cambodia’s economy could still slip into decline.

Khaou Phallaboth, president of construction materials importer Khaou Chungly Group, said that although he had seen improvements across key sectors, it was too early to say the Kingdom’s economy had recovered.

“The global recession is not entirely over,” he said. “The risk is still there. It is like recovering from illness – things could still get worse.”

Cambodia’s combined imports and exports declined by around 17 percent in 2009 to $8.83 billion, from $10.63 billion the previous year.

But the government was now looking towards the future, Chan Nora said.

The MoC was negotiating further exportation of agricultural products to China, but the quality of domestic product was proving to be a barrier for exporting to the wider market, he said.

“We’ve asked for experts to come and help improve our quality,” he said. “We would like to export processed products directly and for a higher price.”

Farmed goods were fast becoming the “most important” domestic export.

Chan Sophal said much of Cambodia’s surplus rice paddy was exported without being recorded in official trade statistics.

“Cambodia’s official exports of agricultural commodities will increase significantly as border trade becomes more formalised and recorded,” he said.

Increased investment in the sector would also increased harvests yields, he said.

Combined imports and exports increased 21 percent from $2.016 billion in the latest quarter from $1.665 billion in the first three months of the year, according to the government statistics.