GARMENT and textile exports grew more than 13 percent in July compared with the same period last month, but insiders say that the Kingdom’s main export industry has not fully recovered from the global financial crisis.

A number of challenges faced the industry – including the high cost of electricity, low productivity and increased unionisation, Garment Manufacturers Association of Cambodia Secretary General Ken Loo said.

“We don’t know whether the effects of the financial crisis are over,” he said. “It made us lose competitiveness.”

Statistics from the Ministry of Commerce’s Camcontrol department show garment and textile exports climbed 11.51 percent to US$298 million in July $268 million from shipments abroad in June.

Ministry of Commerce secretary of state Ok Boung said the garment sector was showing signs of improvement, but that exports were still below the pre-crisis peak. “This year’s climbing of garment products is noticeable, but it’s still below 2008 levels due to fewer exports to the US,” he said.

“The challenge is that we need to lower Cambodia’s prices because there are many competitors.”

Injae Garment factory managing director Nam-Shik Kang said his factory’s orders had increased by 15 percent in July compared with the same month last year.

“The increase is not much help for the company, because of increased costs for raw materials from Korea and China,” he said.

“Furthermore, market prices are down 15 percent compared to last year.”

He said that Cambodia’s garment exports remained contingent on orders from America.

“If the USA’s demand con-tinues for Cambodia’s garments, exports will remain strong.

“Otherwise, there could be a slowdown because of high wages and increasingly expensive materials,” he said.

The country breakdown in Camcontrol’s figures show exports to the US increased 9 percent to $953 million during the first seven months, up from $871 million this time last year.

Shipments of Cambodia’s garments to the European Union grew 12 percent to $405 million, and shipments bound for other foreign markets increased 16 percent to $236 million, the figures show.