The textile group exports up 24% in January-September, but slows in the third quarter

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Cambodia exported $8.630 billion worth of clothing, footwear and other textile-related items in the first nine months of this year, despite heightened global uncertainty, marking a 23.79% increase from $6.971 billion. registered at the same time last year, according to customs. .

The aforementioned category of items, corresponding to Chapters 61 to 64 of the Harmonized Customs Tariff, accounted for just over 50.00% of the value of the Kingdom’s total exports over the period, or $17.258 billion, according to statistics from the Department General of Customs and Excise. of Cambodia (GDCE) indicate.

The Secretary General of the Garment Manufacturers Association of Cambodia (GMAC), Ken Loo, told the Post that exports of these items were slowing in the second half of this year, when the January-June figure had shown a jump. almost two years out of a year. fifths.

Loo’s claim is backed up by GDCE data, which puts the year-over-year increases for the January-June, July and August period at 37.34%, 19.96% and 2, respectively. 71%, and indicate that last month, 7.55% decrease compared to September 2021. Similarly, August and September saw monthly declines of 24.50% and 13.72%, after the rise of 28.94 % in July.

“The situation will get worse in the fourth quarter of 2022 and in 2023. There is no clear picture in sight due to the volatile global situation,” he lamented.

Ky Sereyvath, an economics researcher at the Royal Academy of Cambodia, said the overall increase in such exports seen over the year underscores the robust growth of the Cambodian economy.

“The strong overall increase in exports to the United States in recent years bodes well for economic relations between the two countries, especially now that we chair ASEAN. But, at the same time, there has been a slowdown exports to Europe due to the impact of the Ukrainian conflict on demand there,” he said.

GMAC’s Loo has largely blamed the recent decline in Cambodian overseas sales of Chapters 61-64 items on deteriorating economic conditions in the US, EU and other major export markets, noting that the crisis in Ukraine has exacerbated inflation.

“Many buyers now have a lot of inventory on hand and therefore place [fewer orders]. The expiration of the United States GSP [Generalised System of Preferences] also means that our travel goods business does not enjoy duty free [privileges] for now and some orders [are] temporarily return to China,” he said.

The GSP mentioned by Loo provides non-reciprocal, duty-free tariff treatment for certain products imported into the United States from designated beneficiary developing countries and territories, including Cambodia. However, the scheme expired on December 31, 2020 and has not yet been renewed.

And according to the GDCE, exports of travel goods and related products – corresponding to Chapter 42 of the Harmonized Tariff Schedule – also slowed in the second half, after exploding by 55.71% year-on-year in the first half.

Although July saw a 15.57% month-over-month jump in Chapter 42 exports, August and September saw declines of 37.71% and 1.70%. Similarly, the July figure was up 24.59% year-on-year, while the August and September figures were 3.50% and 17.06% lower on a year-on-year basis.

Loo said a number of factories have partially suspended operations since mid-August, following approval from the Ministry of Labor and Skills Training.

Speaking at a press conference at the Council of Ministers, or Cabinet, on October 12, Labor Ministry spokesman Heng Sour also predicted that exports of garments and textile-related items will decline. in the fourth quarter, due to the pressure on orders resulting from the extension. of the Ukrainian crisis.

Late last month, the World Bank raised its 2022 growth forecast for Cambodia’s real gross domestic product (GDP) to 4.8% from 4.5% in April, due to an increase in exports. clothing, footwear and travel goods (GTF), bicycles and agricultural goods continue to support the post-Covid-19 economic recovery.

“In the second quarter of 2022, the economic recovery accelerated with the expansion of investment and trade. Approved IDE [foreign direct investment] the value of the project reached $315 million in the second quarter of 2022,” the Washington-based development lender said in its latest Macro Poverty Outlook (MPO).

DFO added that non-gold commodity exports “have further accelerated, increasing 33.0% year-on-year in the first seven months of 2022, driven primarily by a recovery in [GTF] exports.

“GTF exports to the United States, Cambodia’s largest export market, remained robust, growing 39.1% year-on-year in the first seven months of 2022. The services sector, in particular the travel and tourism sector has also improved.

“Driven by rising food and fuel prices, consumer price inflation has surged. However, inflation fell to 5.4% in July 2022 from 7.8% in June 2022. The exchange rate remained stable at 4,100 riels per US dollar,” he added.

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