Cambodia spent about $200 million on food and beverage imports to supply the domestic market last year – an increase of more than 10 per cent from the previous year, official data from the Ministry of Commerce show.

Government officials and representatives of the private sector said they were not concerned by the hike, saying the imports are needed to supply the current surge in domestic demand, as local production lacks the capacity.

The data show that the country imported over 290,000 tonnes of food and 2.82 million litres of beverages worth a combined $183.65 million in 2012 compared with 254,000 tons and about 2.27 million litres worth $161.98 million in 2011.

Te Taing Por, president of the Federation of Association for Small and Medium Enterprises of Cambodia, acknowledged improvements in domestic production but said, however, that domestic supply still cannot meet the market demand.

“The rise is due to a sharp growth in domestic demand. Despite our local producers producing more and more, they still can not meet the rise in demand,” he said. “I don’t think the rise of imports of food and beverage is affecting the economy or we cannot produce domestically. Our local production is improving in both quantity and quality.”

Last year, Cambodia’s inflation rate fell from 4.9 per cent in 2011 to about 3 per cent in 2012. Khin Song, deputy director general of the National Institute of Statistics, attributes this decrease to improvements in Cambodian production.

“Right now, we are able to produce more and more products than we need to substitute via imports,” he said.

The largest local bank, Acleda, reported that it provided $54 million to nearly 80,000 small and medium-sized enterprises last year – an increase of 4.4 per cent.

“We increased our loan size to them because they have improved their business management. Last year, we helped facilitate with paperwork and increased the size of loans,” said In Channy, Acleda president and CEO.

Suy Sem, minister of industry, mines and energy, said last year that Cambodia’s food and beverage industry was its second-largest sector after the garment industry. “[It] has a strong local distribution network and has helped reduce our nation’s dependency on food and beverage imports,” he said.

He said that in 2009, after the global financial crisis of 2008, while the value of the garment industry depreciated, the country’s food and beverage industry continued to grow. In 2011, the contribution of the food and beverage industry to the country’s economy was about $1 billion, 40 per cent of that coming from the brewing industry.

To contact the reporter on this story: May Kunmakara at [email protected]