The consumer picture for Cambodia looks moderately bright in the
near term. A strong showing in the Cambodian tourism industry
coupled with robust agricultural export demand, which provides an
impetus to increasing rural incomes, suggest that domestic demand
is likely to hold up reasonably well over the coming quarters.
Longer-term, the Cambodian government's supportive stance towards
agricultural sector development will continue to encourage
progress towards reducing poverty and income inequality, implying
tremendous long-term growth potential for consumer product sales.
Boom In Agricultural Exports To Lift Consumer Incomes
With fortunes of the Cambodian consumer sector closely linked to
the country's agricultural sector, a continued increase in the
country's agricultural exports should provide a strong boost to
domestic demand growth. Demand for Cambodia's milled rice
exports, a major export commodity of the country, has climbed by
25% year-on-year (y-o-y) to reach 1mn tonnes in 2010 and is
forecast to increase by another 20% y-o-y in 2011, according to
estimates from the United States Department of Agriculture
(USDA).
Given the government's increasing focus on boosting agricultural
production - some of the government initiatives include the
approval of more than US$230mn worth of investment for the
agricultural sector in June 2010 and a guaranteed 50% of
commercial bank loans for rice producers - and an improving
demand picture in the European Union and the Association of
Southeast Asian Nations (ASEAN) region (major importers of
Cambodia's agricultural commodities), this growth estimate is not
overly optimistic, in our view.
This optimism in the Cambodian agricultural sector is expected to
filter through to the consumer and is likely to provide a spurt
to consumer spending in 2011. A marked characteristic of the
Cambodian population is its overarching reliance on the
agricultural sector for employment (an estimated 60-70% of the
population is employed in the agricultural sector in 2010) and
higher export ...
No comments:
Post a Comment