In a noteworthy development within the Southeast Asian economic landscape, Cambodia and Vietnam have witnessed a significant surge in their bilateral trade. The trade volume between these two neighboring nations escalated by 24.5 percent, reaching a remarkable $2.32 billion in the first quarter of 2024. This growth further cements Vietnam’s status as Cambodia’s second largest trading partner, following China, according to the latest statistics from the General Department of Customs and Excise (GDCE).
Vietnam emerges not only as a major trade partner but also as a crucial export market for Cambodia, holding the position of the second biggest export destination after the United States. The exports to Vietnam saw a phenomenal increase of 53 percent year-on-year in the first quarter, totaling $1.39 billion. The primary exports include agricultural commodities such as cashew nuts, cassava, coconuts, and rubber.
Conversely, Cambodia’s imports from Vietnam predominantly comprise refined petroleum products and raw iron bars. With the United States accounting for 31.7 percent of Cambodia’s exports and Vietnam capturing a 22.2 percent share, trade dynamics in the region showcase a diverse and growing market engagement. China, holding the third spot, witnessed an 11.4 percent increase in imports from Cambodia, summing up to $366 million, which represents 5.8 percent of the Kingdom’s export market.
Moreover, Vietnam holds the position of being the second-largest source of imports for Cambodia, with the first quarter of 2024 indicating $934 million worth of goods sourced from Vietnam. In contrast, imports from China take the lead, amounting to $2.84 billion for the same period.
Analyzing the trade balance, Cambodia faces a significant deficit with China, amounting to $2.47 billion. However, it enjoys a favorable trade surplus with Vietnam, which stands at $458 million. This dynamic underscores the varying trends in Cambodia’s trade relationships.
Addressing the agricultural trade, Ky Sereyvath, a Senior Economist and Director General of the Institute of China Studies, highlighted the critical role of Vietnam as both a recipient and a processor of Cambodian raw materials. He pointed out that the stringent Sanitary and Phytosanitary Measures (SPS) imposed by Vietnam primarily influence the export capabilities of Cambodian agricultural products, thereby limiting their reach to tertiary markets.
This pattern is notably observed in Cambodia’s cashew nut production. Despite an annual yield of approximately 1.1 million tonnes from nearly 700,000 hectares, a mere 5 to 10 percent of cashew nuts undergo local processing. As a result, the vast majority, over 90 percent, is exported as raw product, with Vietnam being the principal recipient.
In 2023, Cambodia’s export of raw cashew nuts to Vietnam amounted to $837 million, reinforcing Vietnam’s critical position in Cambodia’s agricultural export strategy and casting light on the interconnected nature of Southeast Asian economies.
Source: Khmer Times
