Cambodia’s garment exports rose 14.7 per cent in the first quarter of 2016, from the same period in the previous year. Considering factories have been shutting down and few new ones are opening, this comes as a surprise. Indeed, overall production capacity has reduced but the total value of the country’s exports has been still going up.
Therefore, in the first quarter of 2016, Cambodia recorded 122 factory closures compared to just 12 new garment and footwear factory openings. Cambodia lacks a commercial upstream textile sector and the industry needs to import almost all its raw materials. Roughly 60 per cent of fabric imports are from China, followed by South Korea and Taiwan, which are around 15 per cent each.
But Cambodia is looking into diversifying its raw material import markets. When it comes to exports, Europe accounts for around 45 per cent of while the US makes up 25 per cent, followed by Canada, Japan and China. The country has favorable trade access to major developed markets like Europe, China, Japan and Canada.
Additionally, Cambodia is taking part in negotiations over forging a possible free trade agreement between the 10 members of Asean and Australia, China, India, Japan, South Korea and New Zealand.