Cambodian exports grew by 17 per cent last year, driven by increases in shipments of rice and footwear, with garment export growth easing to a little under 7 per cent, according to a new Ministry of Commerce report.
Outbound shipments in 2015, consisting mainly of rice, garments and footwear, stood at $8.03 billion, up 17 per cent from a year earlier, it said. While rice exports grew by 43 per cent last year on the back of rice shipments to China, footwear grew by 21 per cent, with textiles the only segment to drop, recording a 17 per cent decrease.
The European Union continued to be the biggest buyer of Cambodian exports, accounting for $2.5 billion of $5.7 billion in garment shipments. The United States, previously the biggest garment export market for the Kingdom, imported $1.7 billion in garments from Cambodia in 2015, down 3 per cent from a year earlier.
Ken Loo, secretary-general of the Garment Manufacturers Association of Cambodia (GMAC), said that despite the positive growth in 2015, increase in exports “have not been consistent” when compared to the last 10 years.
He added that the only reason Cambodia was maintaining 15 per cent annual growth in garment exports to the EU was because of the “Everything But Arms” preferential treatment the Kingdom enjoys.
“This advantage is going to be lowered very, very soon when the EU-Vietnam free trade agreement comes into effect,” he said.
According to Loo, Cambodia’s minimum wage is on par with that of Vietnam for this year and as the free trade agreement's effects begin to crystallise, Vietnam will enjoy preferential trade and cost competitiveness, given its higher labour productivity.
“With the minimum wage we are on par at best,” he said. “We are more expensive than the most of Vietnam and productivity is lower in Cambodia.”
On exports decreasing to the US, Loo said the absence of any preferential trading mechanism has caused this decline for the last three years.
“Our engines of growth only lie in the markets where we have a trade preference and we don’t have that in the US,” he said.
Loo added that attempts to get a preferential trade agreement with the US were ongoing, but that it was difficult to foresee when this would materialise.
Footwear exports, which have in the last few years shown rapid growth, were up 21 per cent to $537 million and recorded 30 plus per cent increase in both the EU and US, ministry data shows.
Exports to Canada and Japan were 5 and 2 per cent respectively, with shipments to the rest of the world – all markets excluding Cambodia’s four major trade partners – increasing by 68 per cent, on the back of a 100 per cent increase in rice exports.