Latest figures show overseas revenue in 2008 reached US$3.15 billion as sector looks to emerging markets to continue growth amid global slump
Workers at a garment factory outside of Phnom Penh. Garment exports increased seven percent in 2008, government figures showed, to US$3.15 billion.
Trade deficit increases
Cambodia’s trade reached US$10.2 billion in 2008, up from $9.5 billion in 2007, according to the Ministry of Commerce, but overall the Kingdom recorded an increased trade deficit, up to $1.8 billion in 2008. In 2007, the trade deficit was $1.33 billion, government figures show, after imports grew from $5.4 million to $6 million in the same period. The largest buyer of Cambodian exports was the United States at $2.3 billion in 2008, up from $1.8 billion in 2007; followed by the European Union at $851 million in 2008, up from $649 million in 2007. MAY KUNMAKARA
NEW figures show that the value of garment exports crept up around seven percent to US$3.15 billion last year. The Ministry of Commerce's 2008 report said the US was again the biggest market, worth US$1.95 billion.
Garments are the Kingdom's largest export and account for around three-quarters of export earnings, figures showed.
Minister of Commerce Cham Prasidh said the $213 million increase in garment exports was encouraging in the face of the global crisis.
"Our garment industry is still in a good position because we are able to maintain big purchase orders in the international market, despite the fact that the world has been facing a global financial crisis since late 2008," he said.
Van Sou Ieng, president of the Garment Manufacturers Association of Cambodia (GMAC), an industry body, agreed the figures were positive. However, he remained concerned for 2009: "I think the value of garment exports will drop further in the first quarter of 2009, but I don't believe it will drop dramatically," he said.
I THINK THE VALUE OF GARMENT EXPORTS WILL DROP FURTHER IN THE FIRST QUARTER
GMAC is also concerned that some buyers might cancel orders or be unable to pay for their orders if the economic downturn continues. Kaing Monika, GMAC's external affairs manager, said the trade body had heard that some US retailers had closed.
"Provided the market returns to normal, things could improve further," she said. "But that could take a long time because our biggest market [the US] is facing a serious crisis."
The second-largest market for garment exports is the European Union. Exports to there increased to $631 million last year from $599 million. Kaing Monika said the country could benefit from duty-free access to the EU market provided it met the requirement of sourcing all of its raw materials from the Asean region. Kang Chandararot, director at the Cambodia Institute for Development Study, said the industry continued to suffer from problems with quality, productivity, raw materials and poor infrastructure.
Chandararot said 2008 had been tough but felt things would improve as the government helped seek out new markets such as Russia, Japan and the Middle East.
"If we can access these new markets, we will be able to save our garment exports to some extent," he said.
GMAC stated that the country would export 10,000 jackets and 100,000 pairs of shoes to Japan early this year. But exports to Russia realistically won't begin for three years. Negotiations to export to Russia under the zero-tariff rate were concluded last year, but the deal won't become effective until Russia joins the World Trade Organisation, an event that has been delayed due to disputes with other WTO members.