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Garment inputs hit with price increase

Garment inputs hit with price increase

THE value of Cambodia’s imports of raw garment material increased by nearly 50 percent in the first quarter compared year-on-year, while volumes of material declined by some 24 percent, according to data from Camcontrol, a division of the Ministry of Commerce.

Figures show import volumes dropped to 98,888.46 tonnes in the first quarter 2011 from 129,862.89 last year, while the value increased by 49.83 percent during the same period to US$539 million.

Buyers should consider increasing order prices to assist the industry’s growth, according to Garment Manufacturers Association in Cambodia Secretary General Ken Loo.

“The price of clothes and cotton has nearly doubled on the global market, hence the decline in our import [volumes] of raw material,” he said.

“We’ll see whether or not buyers agree to increase prices, which is very important.”

Ministry of Commerce Secretary of State Chan Nora also noted that rising prices of raw garment materials will impact production.

“I’m not clear on the reasons for the rising cost of raw garment materials, it could be due to an increase on the global market, or a rise in oil prices,” he said.

However, he is confident the industry will continue to grow as a result of the Kingdom’s recovery from the global economic crisis.

China, Taiwan, Japan and South Korea remain the prime import sources, according to Ministry of Commerce.

The industry continues to increase orders from these countries, but there has been no change to cost, Ken Loo said.

“We haven’t seen a drop in orders from buyers, however they should consider the suitability of the price. If they keep the same price, the owners [here] will lose out on profit,” he said.

Cambodia had a number of factories producing cloth and thread during the 1960s, but the sector failed to recover from the civil war.

Additionally, there has been a sharp increase in garment export to EU markets since it relaxed rules of origin for its preferential tariffs on goods from Least Developed Countries, noted Ken Loo.

He believes this will contribute to the continuing growth of the sector.

The Kingdom has 273 garment factories, an increase of 11 since December, while total garment and textile exports in the first quarter 2011 rose 45.48 percent compared year-on-year, according to the Ministry of Commerce figures.

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