Cambodian exports to Vietnam came to $909.803 million in the first quarter (Q1) of 2023 – up 19.90 per cent from $758.814 million in the year-ago period – accounting for 48.72 per cent of the total two-way merchandise trade, rising 4.66 percentage points on-year on the back of monthly trade surpluses logged in February and March, according to provisional Customs (GDCE) data.
The GDCE’s International Trade Balance Statistics bulletin released on April 10 shows that the Cambodia-Vietnam merchandise trade came to $1.867 billion for the three-month period, up 8.44 per cent on-year from $1.722 billion.
At the same time, Cambodian goods imports from Vietnam clocked in at $957.609 million, down 0.58 per cent on-year from $963.238 million, narrowing the Kingdom’s trade deficit with its neighbour by 76.61 per cent to $47.806 million from $204.423 million in January-March 2022.
Vietnam was Cambodia’s third largest trading partner (after mainland China and the US), second biggest export destination (after the US), and number-two import source (after mainland China) for the reference period.
Last month alone, the bilateral merchandise trade came to $782.7 million, up 1.39 per cent from $771.93 million in March 2022 and up 29.16 per cent from $605.98 million in February 2023, GDCE statistics indicated.
In March, Cambodian exports to Vietnam were $418.623 million, up 5.19 per cent year-on-year from $397.972 million and up 31.25 per cent month-on-month from $318.953 million, while imports from the Socialist Republic reached $364.052 million, down 2.65 per cent year-on-year from $373.960 million but up 26.84 per cent month-on-month from $287.027 million.
The Kingdom registered a monthly trade surplus with Vietnam of $54.57 million in March, expanding by 127.3 per cent year-on-year from $24.01 million and 70.9 per cent month-on-month from $31.93 million – which reversed January 2023’s trade deficit, of $134.30 million.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented to The Post on April 11 that Vietnam is the single biggest buyer of Cambodian agricultural products, with notable items including unmilled rice, natural rubber, cashew nuts, cassava, corn, bananas, mangoes and tobacco leaves.
A decent chunk of Cambodian produce is brought to Vietnam through traders, processed by its wide variety of manufacturing enterprises, and re-exported to a whole range of third countries, he said.
He reckoned that an uptick in agricultural output in the Kingdom, coupled with an overall rise in quality, has kept Cambodian exports to Vietnam on a continuous growth path in recent years.
GDCE figures show that the Kingdom’s goods exports to Vietnam rose each year between 2015 and 2022, from $174.335 million to $2.169 billion, amounting to a CAGR (compound annual growth rate) of 43.35 per cent for the period – with the smallest and largest annual percentage jumps seen in 2018 and 2020, at 1.55 per cent and 272.8 per cent.
“Vietnam remains an important destination for Cambodian exports due to the shared border and volume of Cambodian agricultural production,” Heng added, pointing out that the Kingdom also buys a lot of Vietnamese products.
According to Heng, key imports from Vietnam include construction materials, machinery, fuel, electrical and electronic equipment, agricultural fertilisers, and spices, as well as fruits and vegetables.
Border crossings in either direction are now at encouragingly high levels, he said, predicting that these and cross-border freight traffic figures are poised to experience significant increases going forward, driven by additional border crossings and the Phnom Penh-Bavet Expressway – expected to break ground in mid-2023 – that connects the capital to the Vietnamese border.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, linked the increase in Vietnam-bound Cambodian exports to improved diplomatic relations, growing agricultural output, and the two countries’ membership in the Regional Comprehensive Economic Partnership (RCEP).
“Although the value of Cambodia’s exports continues to increase, the bilateral trade balance remains in deficit,” he pointed out, suggesting the export community step up diversification efforts while improving quantities and quality.
Provisional GDCE statistics indicated that Vietnam was Cambodia’s third largest trading partner in 2022, with the two-way merchandise trade amounting to a record $6.136 billion, up 19.64 per cent over $5.129 billion in 2021.
Cambodia’s exports to and imports from Vietnam came in at $2.169 billion and $3.967 billion, respectively, up 9.25 per cent and up 26.20 per cent on an annual basis, expanding the Kingdom’s trade deficit with its neighbour by 55.25 per cent, from $1.158 billion in 2021 to $1.799 billion in 2022.