Pepper plantation in Kampot province Farmers in Cambodia Overcoming the perception gap More than a rural backwater Thriving economy Rising consumption Cambodia
Riel (KHR): 1USD ≈ 4,100 KHR. Currency Dollarized economy between 82 to 84%
GDP $ 22 billion (2017)
GDP growth rate 7.1% (2017)
GDP per capita $1,384 (2017)
Official language Khmer, English widely used
Capital city Phnom Penh
Major cities Siem Reap, Sihanoukville, Battambang
Government type Constitutional Monarchy
Head of State His Majesty King Norodom Sihamoni
Head of Government Prime Minister Hun Sen
Population 15.76 million (2016), annual growth 1.5 %, <25 years old: 52%
Economy Garments, Tourism, Construction, Agriculture
Wet season: May to October, Climate Dry season: November to April, average temperature: 27°C
Major religion Buddhism (96.9%) Cambodia German-Trade
Bilateral Trade Between Cambodia and Germany (US $ millions) $1.980 German imports from Cambodia $1.776
German exports to Cambodia $1.535 $1.408 $1.296 $1.145
$880 $719
$470 $397 $287 $170 $155 $76 $97 $135 $20 $35 $44 $58
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Cambodia German-Trade
Import from Export to Germany % Value (US $ m) % Value (US $ m) Cambodia 1 Textiles 73% $1,440.9 1 Transportation 43% $66.50
2 Foot & headwear 14% $277.3 2 Machines 35% $54.35
Chemical 3 Transportation 10% $192.1 3 4.60% $7.14 products
4 Vegetable products 2.40% $47.5 4 Paper goods 4.40% $6.83
5 Animal hides 0.51% $10.1 5 Instruments 2.50% $3.88 Vegetable 6 Miscellaneous 0.31% $6.1 6 2.40% $3.73 products 7 Chemical products 0.12% $2.4 7 Textiles 2.40% $3.73
8 Plastics and rubber 0.11% $2.2 8 Metals 1.80% $2.80 9 Foodstuffs 0.05% $1.0 9 Foodstuffs 1.30% $2.02
10 Machines 0.01% $0.3 10 Plastics / rubber 0.72% $1.12
Others 0.03% $0.5 Others 2.06% $3.20
Total 100.00% $1,980 Total 100% $155.30 TRENDS Agriculture in the Economy
77% of Cambodian’s live in rural areas….
Agriculture’s contribution to Cambodia’s GDP has almost halved in two decades… …And so has its share of total employment
90 90
80 80
70 70
60 60
50 50
23% Employmentof Total % 27%
40 40 % of Total GDP of Total % 30 30
20 20
10 10
0 0
1996 1997 1993 1994 1995 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: The World Bank TRENDS Rising Production
In absolute terms, general output has significantly increased for most major crops over the past ten years. This trend implies a tremendous increase in land and labour productivity over this period.
Crop production in Cambodia (2005-2016)
700000 12000000
600000 10000000
500000 8000000
Cane 400000 cassava
6000000 output (tons): output
300000 and Sugar
4000000 (tons): output
200000 Annual 2000000
100000 Annual Paddy RicePaddy
0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Paddy Rice Cassava Sugar cane
Source: FAO Stats GOVERNMENT STRATEGY
Cambodia’s focus is modernization, diversification away from rice, increased use of high-quality inputs, and a shift towards export-oriented crops.
1. Agriculture → 1. Improve productivity Manufacturing & Agro- 2. Diversification from rice industry 3. Land reform 2. Improve productivity 4. Investment incentives 3. Export growth promotion 5. Streamline procedures (12% of all exports by 6. Tax free imports on 2025) agricultural inputs & 4. Agro-processing zones machinery 5. Logistics development
Rectangular Strategy IDP 2015-2025 1. 8 strategic value 1. Improve productivity ASDP 2014-2018 Draft Crop Production Plan chains for export 2. Diversification from rice 3. Export growth 2015 Prod. # Value Chain US$ m promotion 1 Rice 3,134 4. Sustainable forestry and 2 Maize 118 fisheries practices 3 Cassava 770 5. Strengthen institutional 4 Mungbean 76 and technical capacity 5 Mango 334 6 Cashews 110 7 Pepper 95 8 Vegetables 199
Source: EuroCham Analysis OPPORTUNITIES
Agriculture Inputs Machinery ▪ Low initial investment ▪ No upfront investment ▪ Strong demand for required (distributor) appropriate products ▪ Strong demand to ▪ Regional competition improve productivity ▪ Exempt from import ▪ Currently supplied by tariffs US/JP ▪ Uncertain regulations ▪ Exempt from import tariffs
Post Harvest & Horticulture/Crop Processing Plantations ▪ Significant initial ▪ No foreign land ownership investment ▪ Economic Land ▪ Investment incentives Concessions available ▪ Few local ▪ High quality unique competitors but products strong regional ▪ Strong local and ▪ Listed as priority by international demand Govt. SWOT ANALYSIS
▪ Natural endowment of resources ▪ Limited organised crop supply chains ▪ Limited use of pesticide and other ▪ Limited R&D for agri-development chemicals ▪ Limited processing or storage facilities ▪ Supportive government policies – new ▪ Lack of food testing bodies for SME Bank, tariff exemptions compliance with SPS standards and food ▪ Geographic Indicators (Rice, Kampot safety Pepper, Kampong Speu Palm Sugar, ▪ Surrounded by competitive neighbours Kampot Durian) (Thailand, Vietnam). ▪ Logistics infrastructure improving S W
O T ▪ Niche Agricultural Products ▪ Crop diversification into more profitable ▪ Cambodian agriculture is vulnerable to export-oriented products climate change (15th most affected ▪ Feed supply for ASEAN Economic country 1997-2016). Community ▪ Social and environmental tensions in ▪ Modernise practices to increase certain Economic Land Concessions productivity ▪ Unsustainable use of natural resources ▪ Rising Protein Demand