Ministry of Commerce says impact of global economic crisis means Kingdom’s main export industry will suffer this year

Garment exports from Cambodia will definitely drop this year.

THE Ministry of Commerce estimates that garment exports will drop "at least" 30 percent this year, a far larger decline than the 5-percent drop estimated previously.

Mean Sophea, the director of the ministry's trade preferences systems department, told the Post on Monday that a lower volume of purchases by consumers in the United States - the largest export market - had caused the revision.

Mean Sophea said the global economic crisis had taught US consumers to shop more economically, which dampened demand for Cambodia's garment exports.

"It is clear that this year's garment exports will drop at least 30 percent because consumers in the United States have cut purchases," he said.

The government last month reported that Cambodia exported US$909 million worth of garments in the first five months of 2009, down 20 percent from the same period last year.

Kaing Monika, the external affairs manager at the Garment Manufacturers Association of Cambodia, an industry body, said Tuesday that putting a figure on the decline is very difficult since the US garment market remains unstable.

Kaing Monika said Cambodian manufacturers must respond by being more competitive on pricing if they want to prevent competitors such as Bangladesh and Vietnam from taking market share in the US.

"Garment exports from Cambodia will definitely drop this year, but I believe that decline will be less than 30 percent because people will buy more clothes during [the Western] New Year," he said.

However, the president of the Free Trade Union of the Workers of the Kingdom of Cambodia, Chea Mony, predicted the situation would worsen, pointing to the fact that 78 factories have closed this year alone, and that another 30 have suspended operations due to a lack of orders.

"We are concerned that the situation of Cambodia's garment exports will deteriorate even further than that predicted by the [ministry] unless the government can get rid of the rampant corruption in the garment sector," he said.