PHNOM PENH: Since 2023, the Association of Southeast Asian Nations (ASEAN) has overtaken the EU to become Cambodia's second-largest export market.

According to the latest reports from the World Bank, the share of the ASEAN market rose to 20.1 percent of the total in 2023, up from 14.6 percent in 2022, while the share of the EU market declined to 15.6 percent of the total, down from 18.0 percent during the same period.

Goods exports to the ASEAN market increased further, accounting for 28.0 percent of total goods exports, reaching US$1.8 billion, or a 33.1 percent y/y increase during the first quarter of 2024.

Exports of cashew nut, cassava, rubber, and mango products contributed 6.6 percentage points, 5.4 percentage points, 3.6 percentage points, and 2.6 percentage points of the increase in goods export to the ASEAN market, respectively, while the rest of the products contributed 15.0 percentage points.

Unlike the U.S. (and EU) markets, which import mostly Cambodia's GTF products and bicycles, the ASEAN market largely imports Cambodia's agricultural commodities, which include cassava, cashew nut, rubber, and mango, which accounted for 25.0 percent, 14.1 percent, 5.7 percent, and 2.4 percent of total goods exports to the market, respectively, during the first quarter of 2024.

Goods exports to the EU, Cambodia's third largest export market, accounting for 14.3 percent of total exports, reached US$903 million, or an 11.9 percent y/y increase during the first quarter of 2024, driven mainly by exports of garment and rice products.

Of the increase in goods exports to the EU market, garment and rice products contributed 17.8 percentage points and 2.4 percentage points, respectively, while the contribution of bicycle exports contracted by 7.8 percentage points.

Japan, China, the United Kingdom, and rest of the world markets accounted for 5.8 percent, 5.8 percent, 3.3 percent, and 11.3 percent, respectively during the first quarter of 2024.

The U.S., ASEAN, and EU markets accounted for 31.4 percent, 28.0 percent, and 14.3 percent of Cambodia's total goods exports during the first quarter of 2024, respectively, compared to 33.8 percent, 24.7 percent, and 15.0 percent, respectively in 2023 (and 40.0 percent, 14.7 percent, and 18 percent, respectively in 2022).

So, a rapid expansion of the share of the ASEAN market, driven mainly by non-GTF exports, which rose to 28.0 percent of total during the first quarter of 2024, up from 24.7 percent in 2023 (and 14.7 percent in 2022), will lessen the country's reliance on the U.S. and EU markets, driven largely by GTF exports.