While sovereign debt crises in Europe and a lagging US economy have yet to curtail cheap Cambodian exports, industry watchers said domestic producers should diversify their target markets to avoid a future slow down.
Exports saw a more than 40 per cent increase year-on-year between January and September, hitting about US$3.6 billion, according to Ministry of Commerce statistics.
Shipments of garments and textiles to the European Union increased by more than 75 per cent during the first nine months of the year compared to last year, according to the ministry. Garment exports to the US increased by about 30 per cent.
“The targeted export markets [the EU and the US] are facing debt crisis, but our total exports to them have kept on a good track, meaning the demand is still there,” Kong Putheara, director of statistics at the Ministry of Commerce, said yesterday.
“Of course we have been impacted slightly. But if we take a look at the speed of growth, we remain stable.”
The low cost of Cambodian garments compared to other regional producers account for the Kingdom’s relative immunity to Western woes, Kong Putheara said. Low- and middle-income households in those countries will continue to purchase Cambodian garments, he said.
Sustained crisis in Europe and continued problems in the United States could eventually hamper exports if the Cambodian government doesn’t set its sights on Asian and Middle Eastern markets, Chheng Kimlong, business and economics lecturer at the University of Cambodia, said yesterday. “We should not only focus on exports to [the US and the EU]. We should also take a look at many other countries, which can be potential markets,” he said.
The government is trying to diversify its market, Kong Putheara claimed, adding that Cambodia has continued investment solicitation in the greater region. Asian countries should join hands to open up new channels of trade that are not reliant on exports to the West, he said.
Garment exports to countries and regions other than the United States and the European Union have seen dramatic increases this year as well, Ministry of Commerce data suggests, although statistics on specific countries were not available. Non-US- and EU-directed garment exports increased by more than 70 per cent during the first nine month of 2011 compared to the same period last year.
Although floods – which have caused more than $100 million in damages – will affect Cambodia’s rice exports, the devastation will not take a toll on garment exports, Kong Putheara said.