Trade with bordering nations falls sharply in first five months compared with last year, say embassies in Phnom Penh

Photo by: Holly Pham

Traders at the border with Thailand bring goods back into Cambodia at Poipet. Trade with Thailand fell 31 percent in the first five months compared with the same period last year.

TRADE In free fall

• 31pc decline in trade with Thailand in first five months
• $633.17m in trade recorded
• 30pc drop in trade with Vietnam during same period
• $520m in trade up to May

Source: Vietnam and Thai embassies

TRADE volumes between Cambodia and each of its larger neighbours, Thailand and Vietnam, dropped sharply in the first five months of 2009 compared with the same period last year.

Figures obtained by the Post from the trade desks of the Thai and Vietnamese embassies in Phnom Penh show overall trade was down around 30 percent in each case. Cambodia runs a trade deficit with both nations.

"In the first five months of 2009, Cambodia-Thailand trade volume was worth US$633.17 million - if compared to the same period of last year of $922.89 million, it dropped 31 percent," the Thai customs report stated.

Trade between the two nations consists almost entirely of imports by Cambodia, with just $18.9 million of the total this year comprised of exports. Those exports were primarily agricultural products, secondhand garments, recyclable metals and fish.

Cambodia's imports of $614 million from Thailand were petrol, consumer products, building materials and cosmetics.

Jiranan Wongmongkol, the director of the foreign trade promotion office at the Thai Embassy, predicts that exports to Cambodia from Thailand will drop 40 percent over the year to $1.2 billion from $2 billion last year.

She said the decline has nothing to do with tensions between the two kingdoms over Preah Vihear temple.

"The drop is not due to the border dispute, but to the global financial crisis that has cut consumer demand due to lower incomes," she said.

The commercial councillor at the Vietnamese Embassy, Le Bien Cuong, said trade between Vietnam and Cambodia was down 30 percent to $520 million from $745 million.

"During this period, Vietnam exported only $437 million to Cambodia's markets, and Cambodia exports of agricultural products to Vietnam dropped from $114 million to $83 million," Cuong told the Post on Wednesday. "This is normal, as it is due to the global economic slump. It is affecting trade between Cambodia and Vietnam and others, too, and it is why Vietnamese businessmen have cut their production."

He said trade volumes between the two countries reached $1.6 billion last year, up from $1.2 billion in 2007. He does not expect trade this year to rise above the 2008 level, but said the figure should reach $2 billion next year.

Mao Thora, a secretary of state at the Ministry of Commerce, pointed out that the global economic crisis has affected trade in most countries around the world.

"Our exports [to these two countries] are not really affected because we are exporting mostly agricultural products," he said." Imports are far more affected since people are cutting their spending."

The decline in imports has had a significant effect on Customs and Excise, which reported a 22 percent drop in the tax take to $280 million in the first six months of 2009. Earlier this month Pen Siman, the director general of Customs and Excise's general department, told the Post that the drop was due to the impact of the global economic crisis.