Cambodia earned $206.728 million from the export of “rubber and articles thereof” in the first four months of 2023, up 38.0 per cent year-on-year from $149.808 million and up 22.7 per cent half-on-half (compared to July-October 2022) from $168.5 million, according to provisional Customs (GDCE) data in “International Merchandise Trade Statistics” bulletins.
This category of items, corresponding to Chapter 40 of the Harmonised System (HS) of Tariff Nomenclature, accounted for 2.858 per cent of the $7.234 billion value of the Kingdom’s total goods exports over the four months – compared to 1.970 per cent and $7.606 billion in January-April 2022, and 2.287 per cent and $7.368 billion in July-October 2022.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post on May 31 that Chapter 40 exports are still exhibiting positive signs, in part due to low domestic demand, despite tepid international rubber prices in recent years.
“Rubber is a lucrative commodity that Cambodia exports to international markets every year,” he said, maintaining that volumes should increase as global political and economic conditions return closer to pre-2020 normalcy.
On the other hand, the domestic rubber market will expand as new tyre and vehicle-assembly plants fire up, he said with a healthy dose of optimism.
In April alone, the Kingdom exported $38.628 million worth of “rubber and articles thereof”, up 20.3 per cent from $32.111 million in April 2022 (year-on-year), but down 19.9 per cent from $48.239 million in October 2022 (half-on-half), down 28.8 per cent from $54.234 million in January 2023 (quarter-on-quarter) and down 29.64 per cent from $54.902 million in March 2023 (month-on-month), according to the GDCE.
This monthly amount was down 56.60 per cent from the record $89.004 million set in December 2022, as indicated by GDCE statistics for the 2015-2023 period. The next highest values on record for the aforementioned timeframe are $58.965 million (February 2023), $56.095 million (November 2022), $54.902 million (March 2023), and $54.234 million (January 2023).
Meanwhile, Prime Minister Hun Sen on May 22 declared that Cambodia wants more factories that employ locals and utilise domestic raw materials such as rubber and cashew nuts. Such investments can introduce new technological solutions and advance domestic industrial development objectives, he said.
The premier was speaking at the official inauguration ceremony for Chinese-owned General Tires Technology (Cambodia) Co Ltd’s $300 million tyre factory in the Sihanoukville Special Economic Zone. The company claims that at least some of the plant’s raw materials will be procured domestically.
The Ministry of Commerce’s business directory notes that General Tires Technology was previously named General Intelligence (Cambodia) Co Ltd, which Shanghai-listed Jiangsu General Science Technology Co Ltd identifies on its website as an “overseas subsidiary”.
In April, Him Aun, head of the General Directorate of Rubber (GDR) at the Ministry of Agriculture, Forestry and Fisheries, commented to The Post that demand and prices for Cambodian natural rubber latex – a primary Chapter 40 item – had been rather subdued for some time.
The remark came on the heels of a GDR report showing that the Kingdom’s first-quarter exports of the milky white sap dropped nearly one-tenth year-on-year to $89.076 million.
Although the department did not directly disclose the corresponding 2022 value for comparison, other statistics in the report place this figure in the $98.348-98.476 million range.
In terms of tonnage, however, Cambodia shipped 65,921 tonnes of natural rubber latex abroad from January through March 2023, marking an increase of 4,182 tonnes or 6.8 per cent year-on-year.
Noting that practically all of the revenue generated by the Cambodian rubber sector comes from exports, Aun blamed the decline in demand and prices on a weak worldwide market, the US’ rising interest rates and its monetary tightening on financial conditions, and the Ukraine crisis, as well as the overall state of global economic instability.
“According to projections from the Association of Natural Rubber Producing Countries, rubber prices won’t be so bad in 2023,” Aun said, although he acknowledged that there have only been “minimal” increases in the area nationwide devoted to rubber cultivation over recent years.
Major buyers of Cambodian latex include Vietnam, China, South Korea, Malaysia, Singapore, Japan and the EU, he said.
According to the GDCE, Cambodian exports of “rubber and articles thereof” clocked in at $541.661 million last year, up 28.34 per cent from $422.062 million in 2021 and up 230.28 per cent from $164.002 million in 2015 – representing an 18.61 per cent compound annual growth rate (CAGR) for the seven-year period.
The most recent Trading Economics data show that, of the Kingdom’s $422.06 million worth of Chapter 40 exports in 2021, $289.02 million went to Vietnam, $27.34 million to Malaysia, $19.47 million to China, $9.1 million to Singapore, $9.03 million to the US, $7.45 million to Canada, $6.13 million to India, $4.44 million to Spain and $1.3 million to Italy with the remaining $49 million going to other markets.
Strangely, the economic data provider did not have a figure for South Korea, which the Observatory of Economic Complexity (OEC) indicates held a 2.382-2.429 per cent market share in 2021, accounting for rounding. These sources combined offer an estimate of $10.055-10.251 million for the peninsular nation.
According to the GDR, Cambodia last year exported 372,900 tonnes or rubber latex worth $527.775 million, up 6,600 tonnes year-on-year. As of end-2022, the Kingdom devoted 404,578ha of land to rubber cultivation, 315,322ha or 77.94 per cent of that being tapped for latex.