Cambodia: 21% fall in Dec 22 pulled annual apparel exports down

Sluggish global demand led to a 21 percent decline in apparel exports from Cambodia in December 2022, which in turn lowered the sector’s overall performance for the year. With December not playing a dampener, the annual exports data would have been better than the 12.69 percent increase over the previous year.

The export of apparel from the Kingdom declined by 20.9 percent to $432.261 million in December from $591.851 million reported for the same month of the previous year. The export of non-crocheted (not knitted) apparel shrunk 1.1 percent to $245.247 million in the last month of 2022.

According to data from the General Department of Customs and Excise, which comes under the Ministry of Economy and Finance, Cambodia shipped  $9.035 billion worth of apparel in the last year, accounting for 40.18 percent of the country’s total foreign income of $22.482 billion for the year.

In the year just gone by, the country reported earnings of $6.367 billion from the shipment of knitted apparel and clothing accessories. This was an increase of 9.4 percent over $5.819 billion worth of exports reported for the previous year. During the same period, the shipment of non-knitted apparel and clothing accessories increased 21.4 percent to $2.668 billion against $2.198 billion reported for 2021.

Earlier in the month of November too, the export of knitted apparel and clothing accessories declined, reflecting a general sluggish global demand scenario due to rising inflation, toughening interest rates and shrinking growth in developed economies. The shipment declined by 9.5 percent to $430.131 million in November 2022 compared with $475.236 million in the eleventh month of last year.

The European Union countries, the UK, the US, Japan and Canada are major importers of apparel
from Cambodia. The Southeast Asian nation imports apparel and clothing accessories (knitted or crocheted) mainly from China, Hong Kong, Vietnam, South Korea and Thailand.

The global economic slowdown impacts Cambodia as it is a small economy fully open to the world for business, Under Secretary of State at the Ministry of Economy and Finance Huot Pum said recently.

“The export orders are unlikely to revive until mid-2023 as retailers in Europe and the US have just too much inventory from the previous seasons,” sustainability and garment expert Massimiliano Tropeano told Khmer Times earlier.

The import of knitted fabric in the full year of 2022 declined 2.1 percent to $2.891 billion from $2.952 billion reported for 2021. The inbound shipment of cotton in the previous year came down 5.9 percent to $507.933 million from $539.958 million reported for 2021. However, the import of manmade fibre increased by 7.2 percent to $1,199.842 million in 2022 compared with $1,119.304 million in 2021.

“The decline in garments export is likely to continue for the January-March period in the absence of a rise in fresh orders,” Ken Loo, Secretary General of the Textile, Apparel, Footwear & Travel Goods Association in Cambodia (TAFTAC) told Khmer Times, last week. Garments export improved in 2022 due to the growth of orders, especially from the US.

The garments and footwear sector may be in a cautious situation in 2023 as orders from Europe will decline, Heng Sour, a spokesman for the Ministry of Labour, reportedly claimed in early December.

Export to the US is expected to attain a new high in the coming years as a large number of American fashion companies are reportedly planning to expand their supply base.