Malaysian exports to Cambodia down 42 percent
Workers receive a cargo container at Preah Sihanouk Autonomous Port. Cambodian imports from Malaysia fell for the first time since 2016 as the oil-rich nation grappled with record-low oil prices. KT/Husain Haider
Cambodian imports from Malaysia fell in 2020 to their lowest figure since 2016, according to a news release issued by Malaysia’s Ministry of International Trade and Industry (MITI).
Malaysia’s 2020 exports to Cambodia dropped 42 percent year-on-year to $368.5 million, said Mohamed Azmin, the MITI’s senior minister.
The pandemic had “directly caused major disruptions to global supply chains, especially the movement of goods and services and severely affected manufacturing activities”, Ali said.
He added that Malaysia had seen exports rebound in the second half of 2020, with December registering the largest increase for the year. Cambodia’s largest import from Malaysia is mineral fuel – coal, petroleum and natural gas. This category accounted for more than $207 million in 2019.
Jeong Weon Ha, chief operations officer of the Cambodia Securities Exchange, said the drop was “likely due to the decline in fuel prices last year”. According to MITI figures, 2020’s petroleum exports fell by 22 percent year -on-year to $135 billion.
Malaysia, the second-largest oil and natural gas provider in Southeast Asia, was one of the most hard-hit countries last year when oil prices dropped to lows not seen since the early 2000s, according to the International Monetary Fund.
Last month, the 24-nation Organisation of the Petroleum Exporting Countries Plus (OPEC+) bloc announced that it would drop production levels by 7.2 million barrels of crude daily, (7 percent of the global daily supply), in order to help stabilise prices. Raphy MD Radzi, Malaysia’s trade commissioner said that 2019 was the only year on record where the chief import to Cambodia was refined petroleum.
“The figures have been in decline since 2019 because Vietnam recently began relying on domestic production through its Nghi Son Refinery,” Radzi explained.
Bloomberg reported last year Petroliam Nasional Bhd (Petronas), Malaysia’s state-owned energy firm, was looking to raise $1.5 billion by reducing its stake in its downstream energy retailing, marketing and shipping division.
Ha said the dip in exports was also intertwined with the decline of the Kingdom’s purchasing power as the local economy struggled to deal with the economic strain brought on by the pandemic.
Cambodia registered a negative gross domestic product (GDP) in 2020 from its declines in the tourism and manufacturing sectors.
Khmer Times previously reported that more than 55,000 garment workers had been left unemployed as more than 110 factories closed.
The garment sector accounted for 80 percent of Cambodia’s exports in 2019 and contributed 16 percent to the Kingdom’s GDP. The UN’s international trade statistics database, COMTRADE, reported that Cambodia imported $84.23 million of textiles for the garment industry in 2019.
“While the data shows that there was a sharp decline, I believe it is still positive when compared with 2017 and 2018. It is almost twice the amount registered in 2017, despite the pandemic,” said Ha.
“In 2021, I believe that trade between our nations will increase as we have strengthened the ASEAN economy through free trade agreements, like the RCEP [regional comprehensive economic partnership],” he added. Khmer Times
