Changing Cambodian Market Pressuring Our Exports Stiff Competition from China and Vietnam (Current Issue No.2866)

            Thai exports to Cambodia have risen over the past decade (2008-2016), recording an average growth of 12.6 percent YoY, excluding exports of refined petroleum products and gold because those prices are volatile in nature. However, it is noteworthy that the growth rate over the past five years (2012-2016) had slowed to 2.2 percent YOY versus the 18.6 percent YoY pace recorded during 2007-2011. This trend likely reflects changes in Cambodia's economic structure, and perhaps, some worrisome prospects for Thai exports toward competitiveness in the Cambodian market.
             Thai consumer products are still competitive in the Cambodian market.  Cambodia is likely to show greater demand for intermediate and capital goods, and Thailand still has the potential to supply those needs in some categories.  KResearch thus views that Thai exports to Cambodia should grow around 6.5 percent in 2017, achieving a value of USD4.977 billion and should be able to maintain the market leadership position in Cambodia.  However, our exports, excluding refined petroleum products and gold – of which prices are volatile – are set to grow only 1.2 percent, presenting a real challenge toward the prospects for Thai exports sent to Cambodia.   
               ​We should closely watch trade rivals, e.g., China and Vietnam. They are not only the second and third largest sources of Cambodian imports after Thailand, respectively, but their exports to Cambodia also seem to have good prospects mainly because of their investments and links with Cambodia via supply chains.  Close trade links between Cambodia and China as well as Vietnam will lead to more exports from them, creating a big test for Thai exports.   ​