Cambodia’s garment and footwear exports recorded double-digit growth to some $4 billion in the first half of this year compared to the same period last year, a National Bank of Cambodia (NBC) report has said.
Industry insiders have speculated that the growth could be due to stronger sales in the US market, with one even going so far as to say that the European Union’s (EU) Everything But Arms (EBA) trade scheme was “inconsequential” due to growing markets elsewhere.
The NBC’s semi-annual report said the Kingdom’s exports of garments and footwear increased 11 percent compared to the same period a year earlier. In comparison, the growth rate is almost double last year’s year-on-year figure of 6.9 percent.
Despite revealing the export growth figures, the report did not point to any concrete reasons for the increase.
Garment Manufacturers Association of Cambodia (GMAC) deputy secretary general Kiang Monika said the growth could be credited to the global economy’s better performance, especially in the US and EU where the Kingdom’s exports are sold.
“We have seen strong growth in apparel product exports to the US market in the first half this year,” he said.
Monika said the export of travel goods had accelerated remarkably after the Kingdom obtained duty-free export status from the US in July 2016.
“Before we got the Generalised System of Preferences [GSP], the export of travel goods to the US was valued at about $50 million per annum. In just six months this year, our exports jumped to $160 million,” he said.
However, exports saw slower expansion in the EU market as the growth rate there remained in single digits, Monika said.
The Kingdom’s exports to Canada, Japan and China, he said, were all on the increase as well, but their relative share of Cambodian exports was still small.
A delegation from the European Commission (EC) and the European External Action Service (EEAS) made a fact-finding mission to Cambodia this month with regard to the EBA.
Chan Sophal, director of the Centre for Policy Studies, said if the Kingdom was removed from the trading agreement, it would impact the textile sector. However, he said it wasn’t a major concern.
“If the EU removed Cambodia from any trading scheme or the EBA, I think it is not a big issue for the Kingdom as it would affect only the factories exporting to that trade bloc,” he said.
However, the Kingdom’s biggest industrial sector accounts for more than 70 percent of the country’s total exports with the vast majority of its products destined for the EU, US and Canada.
The Cambodian garment sector grew four percent last year to hit $7.6 billion – up from $7.3 billion in 2016, according to a Ministry of Labour report.
Additional Reporting by Hin Pisei