Exports of footwear, gaiters and related items in the first seven months of 2023 stood at $808.5 million, down 22.7 per cent from $1 billion in the same period last year, according to the General Department of Customs and Excise of Cambodia (GDCE).
From January to July 2023, export goods (HS Code 64) accounted for six per cent of the total export value of $13.5 billion.
In July 2023, these exports fell 45.7 per cent to $107.9 million from $198.6 million in July 2022, according to GDCE.
Cambodia Footwear Association president Ly Kunthai told The Post that the decline in export revenue started more than a year ago due to lower international orders although Cambodia’s production capacity remained the same.
The decline is a result of the Russia-Ukraine war crisis affecting global economic growth, which saw people in Western countries cut spending.
At the same time, goods ordered last year remain in stock while tourism has yet to fully recover.
“Declining exports are not related to the national elections in Cambodia but it is 100 per cent an external issue. The war has slowed the global economy, so the cost of products must be reduced,” he said.
Footwear, gaiters and the like, parts of such articles which are made in Cambodia have large markets in the US, the EU, Canada, the UK and regional countries, according to Kunthai.
Cambodia makes shoes for famous international brands such as Adidas, Clarks and Timberland.
Hong Vanak, an economics researcher at the Royal Academy of Cambodia, opined that declining earnings in this segment is linked to the international market where a series of crises has prolonged for over three years.
He said exports would recover only if the global political and economic situation fully recovered.
“Although exports in the first half of 2023 have declined, local production capacity in the sector has not declined. In addition, I have seen more investments in shoe factories in Cambodia recently,” he said.
According to the Council for the Development of Cambodia on August 25, three investment projects in the footwear industry with a total investment of $32 million have been approved.
The GDCE said in 2022, the export of goods in the HS Code 64 category totalled $1.7 billion, an increase of 24.8 per cent compared to $1.3 billion in 2021.
The export value is equivalent to 7.7 percent of Cambodia’s total exports of about $22.5 billion last year.