Logo of Phnom Penh Post newspaper Phnom Penh Post - Japan trade up 13%, but surplus shrinks

Japan trade up 13%, but surplus shrinks

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Phnom Penh Autonomous Port’s (PPAP) LM17 container terminal in Kandal Loeu village, Banteay Dek commune, Kien Svay district, Kandal province, as seen on September 20, 2021. Heng Chivoan

Japan trade up 13%, but surplus shrinks

The bilateral merchandise trade volume between Cambodia and Japan totalled $1.789 billion in the first 11 months of 2022, rising by 13.11 per cent on-year, with Cambodian exports accounting for a 59.76 per cent share, down by 1.74 percentage points on a yearly basis, according to the General Department of Customs and Excise (GDCE).

In the January-November period, Cambodian goods exports to and imports from Japan amounted to $1.069 billion and $720.075 million, respectively, up 6.81 per cent and 23.95 per cent year-on-year, narrowing the Kingdom’s trade surplus with the archipelago nation by 16.88 per cent versus the year-ago period.

Last month alone, the Cambodian-Japanese merchandise trade was to the tune of $136.31 million, up 2.69 per cent from $132.74 million in November 2021 but down 11.28 per cent from $153.6 million in October 2022.

The Kingdom’s exports accounted for $80.98 million, up 0.33 per cent year-on-year but down 10.7 per cent month-on-month, while imports came to $55.33 million, up 6.4 per cent year-on-year but down 12.1 per cent month-on-month.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that Cambodian-Japanese trade has been on the rise, buoyed by good diplomatic relations and growing Japanese investment in export-oriented production.

He views Japan’s industrial growth and high quality of life as an opportunity for Cambodia to export agricultural products and labour-intensive commodities.

Despite a consecutive monthly downtrend since July’s peak of $203.38 million, Heng believes that the Regional Comprehensive Economic Partnership (RCEP) – which took effect in both countries on January 1 – will significantly spur bilateral goods trade flows in the long-term.

He also indicated that the CCC’s representative office in Sendai would seek to entice Japanese players with valuable investment opportunities in the Kingdom, and open doors for them to establish and strengthen their presence on the Cambodian market.

“As I see it, the Japanese market will continue to absorb Cambodian goods, especially agricultural products of which Cambodia produces heaps of each year,” he told The Post.

“However, we need to keep in mind that the Japanese market demands high standards, so we need to refine the quality of our products, to be able to gain greater market share.”

According to Heng, Cambodian mainly exports garments and footwear, general components, and agricultural products to Japan, and notably imports items such as agriculture and other machinery, vehicles, and electronics.

Late last month, Minister of Tourism Thong Khon signalled his keenness for All Nippon Airways Co Ltd (ANA) to launch the first post-Covid-19 direct commercial flights between Cambodia and Japan, the ministry disclosed in a statement. Khon was speaking during outgoing Japanese ambassador Masahiro Mikami’s farewell call on him.

Noting that there are now direct flights linking Japan to Thailand and Vietnam, the minister suggested to Mikami that opening air routes to and from Cambodia would materially increase tourist flows between the two countries. Khon also mentioned that ANA suspended its commercial flights to Cambodia in late 2019, as the pandemic dawned upon the world.

In turn, Mikami vowed to keep working to expand Japan-Cambodia relations and cooperation, as well as to advocate for ANA to again fly directly to the Kingdom, even after his tenure as ambassador is over, the statement said.

According to the National Bank of Cambodia (NBC), Japan is the fifth biggest investor in Cambodia after China, South Korea, Singapore and Vietnam. Japanese investors in the Kingdom largely operate in industry, banking, hotels and tourism, construction and real estate, and especially supermarkets and retail, restaurants and services.

Last year, the Cambodia-Japan merchandise trade totalled $1.734 billion, up 1.21 per cent over 2020, with exports to Japan clocking in at $1.094 billion, up 2.95 per cent, and imports $640.513 million, down 1.63 per cent, according to the GDCE. The Kingdom’s trade surplus with Japan expanded 10.2 per cent to $453.116 million.

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