Trade with Malaysia soars 23% to $620M in 2022
Trade with Malaysia soars 23% to $620M in 2022
The merchandise trade volume between Cambodia and Malaysia totalled $620.373 million in 2022, rising by 23.33 per cent over a year earlier, with Cambodian exports accounting for a 18.03 per cent share, down by 2.11 percentage points on a yearly basis, according to the General Department of Customs and Excise (GDCE).
Last year, Cambodian goods exports to and imports from Malaysia amounted to $111.853 million and $508.520 million, respectively, up 10.40 per cent and up 26.60 per cent year-on-year, expanding the Kingdom’s trade deficit with the mainly Muslim nation by 32.06 per cent to $396.667 million.
Malaysia was Cambodia’s 16th-largest trading partner for the third consecutive year in 2022, accounting for 1.18 per cent of the global total of $52.425 billion, up 0.14 percentage points year-on-year.
Last month alone, the Cambodian-Malaysian merchandise trade was to the tune of $41.57 million, down 13.1 per cent from $47.86 million in December 2021 and down 19.1 per cent from $51.36 million in November 2022.
The Kingdom’s exports were to the tune of $11.800 million, up 12.1 per cent year-on-year and up 4.3 per cent month-on-month, while imports came to $29.767 million, down 20.3 per cent year-on-year and down 25.68 per cent month-on-month.
Speaking to The Post on February 2, Cambodia Women Entrepreneurs Association (CWEA) president Keo Mom suggested that the Kingdom’s export community focus on establishing a stronger presence in Malaysia, indicating that there are loads of underprioritised, overlooked and yet-to-be-bulk-produced local products that could have a potential market in the regional powerhouse, especially agricultural goods.
“I believe that the government’s constant introduction of policies involving agriculture, including the development of the sector, will accelerate growth of Cambodia’s agricultural exports to Malaysia going forward,” said Mom, who is also chairwoman of LY LY Food Industry Co Ltd, one of the Kingdom’s largest food processing enterprises, which trades as LYLY Food.
She shared that LYLY Food rice crackers and other snacks have been on sale in Malaysia for “four or five” years, but at a rather limited scale.
Royal Academy of Cambodia economics researcher Ky Sereyvath remarked that, riding on a wave of growth, the Kingdom has emerged as a major buyer of goods from Malaysia, which he described as a prime producer of electronics, construction materials, and daily necessities in the region.
He opined that the robustness and maturity of Malaysia’s industrial and agricultural sectors have translated into a vast production capacity for a host of goods, as well as production costs at a fraction of the corresponding rates in Cambodia.
“Given Malaysia’s booming industry and agriculture, Cambodia could reduce its trade gap by exporting some potentially successful products for processing in Malaysia,” he said, offering milled rice, rubber latex, and oil palm fresh fruit bunches (FFB) as examples.
At the Cambodia-Malaysia Business Forum 2022 on February 17, CDC secretary-general Sok Chenda Sophea said it was imperative that the Kingdom improve its environment for investment in the “new normal” of Covid-19.
This, he said, would require Cambodia to adopt a more proactive approach to inspire and lure in quality and sustainable investment.
He added that the new Law on Investment, promulgated on October 15, “is designed to respond to geopolitical and economic shifts, Industry 4.0, the digital transformation and the disruption of the global value chain caused by the Covid-19 epidemic”.
“It aims to maximise benefits from the rapidly evolving regional economic structure,” Chenda Sophea said.
He voiced optimism that the forum would provide Malaysian players with a clearer and deeper understanding of the law and convince them to invest more in the Kingdom.
Cumulative foreign direct investment (FDI) inflows into Cambodia between August 5, 1994 and December 31, 2021 came to 168.8 trillion riel ($41.0 billion), up 11.2 per cent from the nearly 152 trillion riel recorded by end-2020, with the Greater China region – comprising mainland China, Hong Kong, Macau and Taiwan – accounting for the lion’s share, according to the National Bank of Cambodia (NBC).
Malaysia was the sixth largest investor in the Kingdom with $1.9 billion, or a 4.6 per cent market share, after the Greater China region ($18.0 billion; 43.9% share), South Korea ($4.9 billion; 11.9%), Singapore ($2.7 billion; 6.5%), Vietnam ($2.5 billion; 6.1%) and Japan ($2.4 billion; 5.9%).
For reference, August 5, 1994 was the day when Royal Decree No 03/NS/94 promulgated the old Law on Investment and established the Council for the Development of Cambodia (CDC), the government’s highest decision-making body for large-scale investments.
