Vietnam-Cambodia Trade Drops 29 Percent

Trade between Vietnam and Cambodia for the first eight months of the year fell 29 percent compared to the same period last year, though a predicted increase in trade activity in the fourth quarter is expected to offset some of that drop, according to figures from the Vietnamese Embassy in Phnom Penh.

Le Bien Cuong, commercial attache at the Vietnamese Embassy, said that bilateral trade between Cambodia and Vietnam hit $848 million between January and August, compared to $12 billion in the same period last year.

According to embassy figures, Vietnam exported $726 million worth of goods to Cambodia in the first eight months of the year, marking a 29.5 percent fall compared to the same period last year, while Cambodia?s exports to Vietnam reached $122 million, down nearly 27 percent

?The major falls [have been seen] with materials for garments and food,? he said, referring to Vietnam?s exports to Cambodia.

Despite the large fell in trade volume between the two countries, Mr Cuong said he expected Vietnamese exports to jump to $12 billion by the end of the year, resulting in a 16 percent drop compared to last year's total amount.

Likewise, Cambodian exports are also expected to make a come-back hitting $195 million, down just 7 percent.

Statistics at the embassy show $297 million worth of Vietnamese exports to Cambodia between January and August to be for petroleum-based fuels, though Mr Cuong said no comparative year-on-year data on individual items are currently available.

Mao Thora, secretary of state for the Ministry of Commerce, said that Cambodia?s exports to Vietnam?which largely consist of agricultural products?would certainty increase next year as more companies invest in food processing.

?Despite the financial crisis, Cambodia?s exports to Vietnam have not suffered too much and are expected to do much better next year,? he said.

Mr Thora explained that only 10 percent of Cambodia?s five main agricultural products?rice, rubber, corn, cassava and cashew?is currently processed domestically. The remaining 90 percent, he said, is either used for animal feed or exported in its raw form abroad.

Earlier this month, Cambodian state-enterprise Green Trade signed a preliminary agreement with the Vietnamese-owned firms Vina-food II and Investment Development Company of Cambodia to establish a joint-venture processing plant called Cavi Food, which will aim to increase Cambodia?s food processing capacity.

Mr Thora said the agreements would also be signed in the coming weeks with the Malaysian and South Korean governments to help attract food processing firms from the two countries to Cambodia.

?We don?t have the capacity yet to process rice to international standards,? he said. ?With these three countries onboard we hope to have the factories in the country that will be able to process to that standard.?

Thon Virak, director general for Green Trade, said that the joint venture company will aim to increase the amount of processing of raw produce grown in Cambodia as well as to help improve the country?s capacity to store surplus stock, much of which is never domestically processed due to a lack of facilities.

?We will help increase the amount that Cambodia exports,? he said, adding that the final agreement between the three companies should be finalized next month.

Sourced = The Cambodia Daily