Exports to Cambodia to fall 30% this year: Border tensions also deter investors

(Bangkok Post – McClatchy-Tribune Information Services via COMTEX) — SIEM REAP, Cambodia — Thailand’s exports to Cambodia are set to slide by 30 percent this year, as the neighbouring state plunges into unprecedented economic and financial hardship.

Thailand’s exports including border trade are forecast to be worth US$14 billion this year, compared with $20 billion in 2008, said Jiranun Wongmongkol, Thailand’s minister counsellor (commercial) in Cambodia.

Leading exports are automobiles, motorcycles, refined oil, construction materials, rubber tyres, food and beverages.

The slump in trade is due to the global downturn, rather than continuing tension over the disputed Preah Vihear temples, she said.

“The drop is not due to the border dispute, but the global financial crisis that has cut consumer demand. The drop is mainly due to lower demand for building materials, consumer products and petroleum,” she said.

Over the first three months of this year, Thai exports to Cambodia sank 28.23 percent to $370.59 million, down from $516.37 million in the same period last year.

Cambodia’s garment exports, which rely mainly on the US market, have been hit especially hard by the slowdown. About 200 clothing factories have shut down and about 50,000 workers have been laid off, said Mrs Jiranun.

Further redundancies are also anticipated as the world and US economies remain in the doldrums.

Cambodia’s tourism has also been damaged by the world recession and by Thailand’s recent airport closures and political riots, which scared away tourists from markets such as the US, Europe and South Korea, who use Thailand as a gateway to Cambodia, said Mrs Jiranun.

The Preah Vihear dispute has also reportedly deterred 60 percent of the 200,000 to 300,000 Thai tourists who visit Cambodia each year.

Cambodia welcomed about 2.2 million foreign visitors in 2008, a figure it aimed to increase to 3.1 million in 2010. But foreign tourists are set to fall by more than half this year, say industry experts.

“Worse still, Cambodia’s economy is now in a very poor condition as it is suffering from deflation and a ‘bubble-burst’ as Thailand experienced during the economic crisis in 1997,” she said.

But Thai products still have potential in Cambodia — particularly food and beverages, which are very popular among its consumers — said Mrs Jiranun.

Chaiyapruk Phumimuang, managing director of Angkor T.K. Travel & Tour Co, which operates food chains and Tara Hotel in Cambodia, said Cambodia offers appealing investment opportunities, particularly in tourism and manufacturing, given its low labour costs.

“Thai investors are still reluctant to invest in Cambodia for fear of national conflict following the temple dispute, leaving investors from other countries such as South Korea, Singapore, Malaysia and Vietnam to rapidly overtake them,” said Mr Chaiyapruk.

source: http://news.tradingcharts.com/futures/9/3/124534339.html

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