Cambodia's first-quarter exports to South Korea soared nearly 80 per cent year-on-year, driven mostly by garments and agriculture products, but imports still accounted for most of the trade between the two countries.
Total exports to South Korea jumped to US$30 million for the first three months of 2012, up 76 per cent from $17 million in the year-ago period, according to data from the Korea Trade-Investment Promotion Agency (KOTRA) in Phnom Penh.
At the same time, Korean imports reached $130 million from $101 million, a 29 per cent year-on-year gain, KOTRA said.
Total trade between the two countries in the quarter rose 36 per cent to $159.9 million compared to $117.3 million last year.
“We got increases in the garment industry, with around 20 new garment factories from Korea opening in the last year,” KOTRA manager Kim Dohyun said. “That’s the main reason for the export increase.”
Garments and footwear exports were up 204 per cent to $4.9 million for the period, according to KOTRA.
More Korean investors are eyeing Cambodia as rising labour costs make China and Vietnam less attractive destinations for garment enterprises, he said.
While there have been wage increases in the Kingdom as well, they have not outpaced other countries in the region.
Korea Chamber of Commerce in Cambodia chairman Kang Nam-shik agreed, saying there has been a rush of garment factories to Cambodia over the past six months.
“Cambodia is still attractive for both its labour quality and wages to Korean investors,” he said.
KOTRA’s Kim Dohyun noted that the Kingdom’s resurgent economy and a free-trade agreement between the two countries helped to drive the numbers.
“Cambodia’s economy is growing, and people have money to spend,” he said, adding that the FTA had streamlined the trade relationship.
The Kingdom’s agricultural products also played a role in the growth in trade between the two countries, though these products, such as milled rice and cassava, were just starting to find a market in Korea, Kim Dohyun said.
The Kingdom, meanwhile, imported raw materials for its garment and textile industry, vehicles and foodstuffs, according to KOTRA.
Kim Dohyun did say that the recurring factory strikes could weigh on the industry by scaring away investors.
“If workers are still on strike, maybe it can cause some problems for investors, making them more interested in Myanmar,” he said.
International Monetary Fund deputy managing director Naoyuki Shinohara told the Post last month that the opening up of Myanmar’s political and economic systems would put the company in better position to compete with Cambodia for investment.
“Myanmar could provide a very good base for the garment industry,” he said.
To contact the reporter on this story: May Kunmakara at [email protected]