The five biggest buyers of Cambodian goods accounted for 65.09 per cent of the Kingdom’s merchandise exports in the first 10 months of 2022 – at $12.204 billion or up 14.83 per cent on-year – comprising mostly of agricultural and textile-related products.
The same five destinations – the US, Vietnam, Japan, mainland China and Canada in order of market share – were also the top buyers in January-October 2021, taking in $10.627 billions worth of goods then, representing a 67.60 per cent share.
In the January-October period, Cambodia’s merchandise exports totalled $18.748 billion, up 19.25 per cent compared to the $15.722 billion logged in the same time last year.
The US imported the most Cambodian goods, at $7.618 billion, marking a 25.39 per cent year-on-year rise and accounting for a 40.63 per cent share, followed by Vietnam ($1.664 billion; up 2.77%; 8.89% share), Japan ($988.389 million; up 7.38%; 5.27% share), mainland China ($987.872 million; down 19.17%; 5.27% share) and Canada ($945.315 million; up 19.66%; 5.04% share).
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng posits that many big companies have been convinced to buy Cambodian products due to their reasonable prices and quality, on top of the Kingdom’s strategic geographical location and preferential tariff arrangements with a host of trading countries.
He offered his two cents that Cambodian exports could grow materially faster, especially those shipped to the top five markets, should the Kingdom maintain a steady influx of investment.
“I expect Cambodia’s exports to all those countries to jump further, especially as global economic growth improves,” Heng told The Post on December 6.
Ky Sereyvath, economics researcher at the Royal Academy of Cambodia (RAC) and director of the RAC’s China Studies Center, told The Post that the top five export markets have been major buyers of Cambodian goods for a long time, notably of garments, bags, footwear and agricultural products.
He reckoned that the chief reason why they choose to buy so many Cambodian goods is because they either have a free trade agreement (FTA) with the Kingdom, or otherwise provide it with preferential tariff treatment.
An FTA is an international treaty between two or more economies designed to reduce or eliminate certain barriers to imports and exports among them, generally while safeguarding safety, security, health and other legitimate regulatory objectives. Such a pact can also serve to facilitate and promote greater economic ties among signatories in areas such as investment and intellectual property protection.
Sereyvath added: “Through good government-to-government cooperation, I’m optimistic that exports to the five markets will continue on an upward trajectory.”
Still, he suggested local players exert themselves to scale up, strengthen and diversify production, with special emphasis on quality, to develop and maintain stable and robust export markets.
Meanwhile, Hong Vanak, director of International Economics at the RAC, zeroed in on the fact that the five markets buy distinct Cambodian goods: The US and Canada mostly purchase textile-related items and bicycles, whereas Japan notably buys agricultural products and electrical and electronic components.
On the other hand, Vietnam and mainland China predominantly go for agricultural products, he said, commenting that Cambodia has great agricultural potential, and recommending the government formulate policies aimed at boosting crop yields.
Vanak also sees the UK and South Korea emerging in the coming years as forces to be reckoned with among the Kingdom’s top export destinations.
GDCE figures show that the UK and South Korea were the seventh and 15th biggest buyers of Cambodian goods in the January-October period, registering $763.391 million and $190.529 million, respectively, up 27.52 per cent and 21.57 per cent year-on-year.
Following the result of a referendum held in 2016, the UK’s divorce from the EU on January 31, 2020 – commonly known as Brexit – gave Britain the freedom to set an independent trade policy.
London has since committed to increasing access to UK markets for developing countries such as Cambodia, raising expectations for a sizeable uptick in sales of Cambodian merchandise to the four-nation union.
On the East Asian front, a bilateral FTA between Cambodia and South Korea went into effect on December 1.
Under the pact, coupled with the Regional Comprehensive Economic Partnership (RCEP), the Kingdom will lift tariffs on 93.8 per cent of goods traded, with South Korea scrapping duties on 95.6 per cent, according to the peninsular nation’s Ministry of Trade, Industry and Energy.
In 2019, the top five export markets – the US, Japan, Germany, mainland China and the UK that year – accounted for a 58.31 per cent share, which rose to 61.21 per cent in 2020, the first full year of Covid-19, when Vietnam and Singapore pushed Germany and the UK out of the list, GDCE statistics indicate.