Footwear exports slip 23% y-o-y to $323.8M in Jan-Mar
Footwear exports slip 23% y-o-y to $323.8M in Jan-Mar
Cambodian exported “footwear, gaiters and the like; part of such articles” to the tune of $323.757 million in the first quarter of this year, down 23.18 per cent year-on-year (y-o-y) from $421.443 million, as indicated by provisional Customs (GDCE) data, in a downturn analysts claim could persist throughout the second quarter.
This category of items, corresponding to Chapter 64 of the Harmonised System (HS) of Tariff Nomenclature, accounted for 6.00 per cent of the Kingdom’s total exports in the January-March period, which amounted to $5.392 billion.
In March alone, Chapter 64 exports totalled $121.927 million, down 14.86 per cent from $143.208 million in March 2022, down 14.02 per cent from $141.815 million in September 2022, down 25.68 per cent from $164.053 million in December 2022, and down 9.45 per cent from $134.649 million in February 2023.
Speaking to The Post on May 8, Cambodia Footwear Association (CFA) president Ly Kunthai blamed the declines in footwear-linked exports on the ongoing socio-economic crises across the globe.
Covid-19-induced fallout, geopolitical conflicts between the world’s major powers, and the Russo-Ukrainian conflict have markedly slowed economic growth, travel flows and household incomes almost everywhere in the world. These are some of the main forces driving people to cut down on unnecessary non-food expenses.
Kunthai explained that orders for Chapter 64 had dwindled during the era of lockdowns and travel restrictions, and although there had been some improvement in early 2022, the knock-on crisis from the Ukraine conflict eroded these gains, notably so beginning in August.
“Slowdowns in the economic growth of countries that buy ‘footwear, gaiters and the like; part of such articles’ from Cambodia [such as the US, UK and European nations] have reduced export earnings for almost a year. So far, overseas orders have not shown any positive signs,” he rued.
However, Kunthai is optimistic that the current crisis will ease “soon” and that orders for footwear and similar items may increase to some extent from the second half (H2) of 2023.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia (RAC), said that the Kingdom is “almost entirely dependent” on markets such as the US, EU, UK and Canada for Chapter 64 exports. Improvement in socio-economic conditions in all of these countries would result in swift rebounds in orders for Cambodian goods, he posited.
He claimed that the drop in exports of these items has also adversely affected Cambodian economic growth. “The decline in exports of ‘footwear, gaiters and the like; part of such articles’ is due to diminished demand on the international market – Cambodia’s production capacity remains very high,” Vanak said.
Despite the reductions in garment, bag and footwear exports, the numbers of companies applying for investment projects and subsequently receiving approval from the Council for the Development of Cambodia (CDC) are steadily increasing, he added.
In 2022, Cambodian Chapter 64 exports clocked in at $1.737 billion – up 24.77 per cent from $1.392 billion in 2021 and up 54.69 per cent from $1.123 billion in 2020 – equivalent to 7.73 per cent of the Kingdom’s total exports for last year, which came in at $22.482 billion, according to provisional GDCE figures.
