Cambodian goods exports to South Korea reached $90.599 million in the first four months of 2023, up 19.33 per cent year-on-year and 14.4 per cent half-on-half (compared to July-October 2022), according to provisional Customs (GDCE) data compiled in “International Merchandise Trade Statistics” bulletins.
The volume of merchandise traded between the two countries in January-April 2023 was to the tune of $239.165 million, down 19.73 per cent year-on-year but up 0.67 per cent half-on-half. At the same time, the Kingdom imported $148.565 million worth of goods from South Korea, down 33.09 per cent year-on-year and down 6.2 per cent half-on-half.
Cambodia’s trade deficit – the amount by which a country’s imports exceed its exports – with Asia’s fourth-largest economy for the four-month period stood at $57.966 million, narrowing by 60.33 per cent year-on-year as well as by 26.83 per cent half-on-half.
South Korea was Cambodia’s 11th biggest trading partner for the period, representing 1.58 per cent, 1.252 per cent and 1.874 per cent of the Kingdom’s international trade ($15.161 billion), exports ($7.234B) and imports ($7.927B), respectively, GDCE figures indicate.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post on May 21 that the increasing complexity of the global environment has slowed down trade between nearly all nations.
Governments and individuals worldwide have reduced spending amid heightened economic risks, thereby tamping down goods demand as well as purchase orders, he said.
On the other hand, Heng attributed the uptick in Cambodian exports to South Korea to high demand for locally made commodities, notably everyday essentials – like fruits and other food items.
He stressed that Cambodia is exporting a wider variety of goods and weaning itself off its reliance on textile-related items.
“The decline in the amount of goods traded between Cambodia and [South] Korea during the period is not a cause for concern, this trend is evident in practically every country,” Heng opined, remarking that greater volumes of Cambodian produce are being imported into the peninsular nation.
He asserted that the Cambodia-Korea Free Trade Agreement (CKFTA) and Regional Comprehensive Economic Partnership (RCEP) will enhance diplomatic and trade relations as well as improve import-export earnings going forward.
The 15-nation RCEP is the world’s largest trade pact, encompassing Cambodia, South Korea, the nine other ASEAN member states, and four additional Asia-Pacific countries. That deal took effect on January 1, 2022 in the Kingdom and exactly one month later in South Korea. The CKFTA entered into force on December 1 last year.
According to Heng, the bulk of Cambodian exports to South Korea comprise textile-related items like garments, footwear and travel goods, electronic components and agricultural products. Notable imports include vehicles, electrical and electronic equipment, foods and beverages, and pharmaceuticals, he said.
‘Ensure growth from year to year’
Last month alone, the Cambodia-South Korea merchandise trade volume came to $57.55 million, down 9.4 per cent from April 2022 (year-on-year), down nearly two per cent from October 2022 (half-on-half), down 16.1 per cent from January 2023 (quarter-on-quarter), and down 0.1 per cent from March 2023 (month-on-month), according to GDCE statistics.
Cambodian exports reached $18.065 million, up 23.8 per cent year-on-year, up 15 per cent half-on-half, but down 33.8 per cent quarter-on-quarter, and down 26.4 per cent month-on-month.
Imports, meanwhile, closed the month at $39.488 million, down 19.3 per cent year-on-year, down 7.6 per cent half-on-half, and down 4.29 per cent quarter-on-quarter, but up 19.4 per cent month-on-month.
The Kingdom’s trade deficit with South Korea in April came to $21.42 million, down 37.6 per cent year-on-year, and down 20.6 per cent half-on-half, but up 53.5 per cent quarter-on-quarter, and up 151 per cent month-on-month.
South Korea was Cambodia’s 17th largest export destination and number-10 import source last month, representing 1.472 per cent, 0.981 per cent and 1.911 per cent of the Kingdom’s international trade ($3.909B), exports ($1.842B) and imports ($2.067B), respectively, GDCE numbers show.
Meanwhile, Minister of Economy and Finance Aun Pornmoniroth on April 3 met with South Korean ambassador Park Jung-wook at his ministry.
At the meeting, the minister commented that capital inflows and private investment volumes ascribed to South Korea have been steadily increasing, and appreciated the Group of 20 (G20) member state’s contributions to the peace-building and restoration process in Cambodia as well as socio-economic development.
He asserted with confidence that the CKFTA will materially increase two-way trade and that the bilateral Double Taxation Agreement (DTA) could be harnessed to improve the investment climate and attract more Korean players “to ensure growth from year to year”.
To recap, the DTA treaty went into effect on January 29, 2021 with provisions generally coming into force on January 1, 2022.
“Recently, large Korean companies have come to invest in the establishment of vehicle assembly plants in Cambodia for well-known carmakers,” Pornmoniroth noted.
Provisional GDCE statistics showed that South Korea was Cambodia’s 14th largest trading partner in 2022, with the two-way merchandise trade totalling $778.924 million, up 0.63 per cent over 2021, but still down 11.66 per cent from the record $881.761 million reported in 2019.
Cambodia’s exports to and imports from South Korea came in at $233.638 million and $545.286 million, respectively, up 20.38 per cent and down 5.98 per cent on a yearly basis, narrowing the Kingdom’s trade deficit with the East Asian country by 19.2 per cent, from $385.871 million in 2021 to $311.648 million in 2022.
Notably, the $8.53 million monthly trade deficit with South Korea reported in March is the lowest amount ever recorded in the GDCE’s records for 2015-2023; the second smallest figure was the $13.95 million registered in January 2023. In the aforementioned time period, Cambodia has yet to post a monthly trade surplus with the world’s tenth-largest economy.
For reference, the lowest monthly trade deficit numbers booked each year from 2015-2022 were: $20.03 million (February 2015), $15.44 million (August 2016), $16.04 million (January 2017), $20.79 million (March 2018), $25.51 million (January 2019), $17.48 million (July 2020), $15.9 million (April 2021) and $14.17 million (September 2022).