Trade with South Korea dips, set to rebound under new FTA
Trade with South Korea dips, set to rebound under new FTA
Bilateral trade volume between Cambodia and South Korea amounted to $884.88 million in 2020, down 17.77 per cent from $1.032 billion in 2019, according to data from the Korea International Trade Association (KITA).
According to the data, Cambodia exported $317 million of goods to the South Korean market last year, a drop of 5.4 per cent, while Korean exports to the Kingdom totaled $567 million, down 18.6 per cent from $696 million in 2019.
Cambodian Chamber of Commerce vice-president Lim Heng said declines in exports were due to fallout from the Covid-19 outbreak.
However, he expects Cambodia’s exports to recover when the Cambodia-South Korea Bilateral Free Trade Agreement (FTA) eventually takes effect. The two sides held a fourth round of FTA talks in November last year, and negotiations are expected to be completed this year.
“We hope that an FTA between Cambodia and South Korea will double Cambodia’s exports to Korea, and we hope export goods will exceed imports when this agreement comes into force,” Heng said.
He noted that Cambodia’s primary exports to South Korea include garments, footwear, travel goods, beverages, rubber, medicines, agricultural products and components for electronic equipment.
Imports from South Korea include vehicles, electronics, kitchen equipment and plastic products, among others.
Hun Lak, CEO of Richfarm Asia Co Ltd, a company investing in Keo Romiet mangoes, told The Post that some Cambodian agricultural products already have a market presence in South Korea and demand is strong.
“In recent years, we have seen items like fresh vegetables and mangoes exported to the Korean market, and their consumers have been satisfied that Cambodian products are of high quality and meet international standards,” he said.
Lak added that his company plans to expand exports of fresh mangoes to the Korean market this year after previously establishing market access.
“We are in talks with Hyundai to collaborate on mango-pest control machinery to export to Korea. We plan to export fresh mangoes this year, which may begin with harvest season next month. However, I’m worried about the lack of direct flights to South Korea,” he said.
Preliminary aggregate trade data announced by Prime Minister Hun Sen at a special live news conference late last year pegged the Kingdom’s total international trade volume at $32 billion, of which exports amounted to roughly half.
Hun Sen declared that strong growth had been achieved by major agricultural products with a total value of $3.81 billion.
Rice exports increased 11.11 per cent to 675,000 tonnes worth $514 million. Cassava exports exceeded seven million tonnes worth nearly $2 billion.
Exports of cashews amounted to 218,884 tonnes worth $288 million, and 850,000 tonnes of exported mangoes were worth $473 million. Foreign sales of 313,000 tonnes of yellow bananas generated $551 million.
