{"id":12874,"date":"2014-11-13T07:21:02","date_gmt":"2014-11-13T14:21:02","guid":{"rendered":"http:\/\/www.denimsandjeans.com\/?p=12874"},"modified":"2016-01-05T05:28:16","modified_gmt":"2016-01-05T12:28:16","slug":"cambodia-increases-minimum-wages","status":"publish","type":"post","link":"https:\/\/www.denimsandjeans.com\/recovery\/latest-denim-reports\/cambodia-increases-minimum-wages\/12874","title":{"rendered":"Cambodia Increases Minimum Wages"},"content":{"rendered":"

\"\"Cambodia had been witnessing a long unrest with unions fighting for over 70% increase in wages. After months of\u00c2\u00a0 discussions, unrest and problems, the govt. finally decided to increase the minimum wages by about 28%.<\/p>\n

The minimum wages in Cambodia had been US$100 and and unions had been fighting to increase them to $177 per month. However, this huge increase was not acceptable to the Labour Advisory Committee of the Govt. which gave a recommendation to increase it to $123 .\u00c2\u00a0 This amount was increased by the Labor Minister by $5 to $128 .<\/p>\n

The unions had demanded $177 but had mentioned that anything less than $140 was unacceptable. It remains to be seen whether the current declaration will lead to further protests or will the workers accept the amount.<\/p>\n

The govt. has been reluctant to meet the union\u00e2\u20ac\u2122s demands as it fears relocation of factories out of Cambodia. The textile industry is big in the country\u00e2\u20ac\u2122s economy\u00c2\u00a0 with about 500,000 workers employed there. Any major increases can swiftly affect the industry. Cambodia ,even after the increase, has one of the lowest wages in the world.<\/p>\n

How is the increase in wages going to affect the denim industry in Cambodia ?<\/h3>\n

The increase is surely going to increase the costs and reduce the margins for the producers and may increase the final prices which may or may not be very palatable to the buyers.\u00c2\u00a0 We have already seen before that the average price of jeans from Cambodia to EU is more than that from countries like Bangladesh . The impact of current increase would be further affecting the prices.<\/p>\n

Lets take a look at the exports of jeans and denim apparel into EU and US from Cambodia in the period 2010 \u00e2\u20ac\u201c2014.\u00c2\u00a0 We will see the quantities , average prices, values and volumes in this period in the tables below. Also we compare the prices from Cambodia with that of average prices of denim from around the world and also with select countries to see where Cambodia stands currently in terms of its pricing competitiveness.\u00c2\u00a0 We also see whether US or EU is going to be its main focus market in terms of prices, volumes etc from our data bank.<\/p>\n

\"Report<\/a><\/p>\n

Exports of Jeans to EU27 from Cambodia 2010-2014<\/span>
\n[private_special]<\/h3>\n\n\n\n\n\n\n\n\n
Year of<\/b> <\/b>
\nImport<\/b><\/td>\n		<\/b>Jeans
\n(million pcs)<\/b><\/td>\n		Total Value<\/b> <\/b>
\n(million Euro)<\/b><\/td>\n		Average Price
\n(Euro\/pc)<\/b><\/td>\n<\/tr>\n
2010<\/b><\/td>\n0.99<\/b><\/td>\n5.60<\/b><\/td>\n5.66<\/b><\/td>\n<\/tr>\n
2011<\/b><\/td>\n4.98<\/b><\/td>\n26.82<\/b><\/td>\n5.38<\/b><\/td>\n<\/tr>\n
2012<\/b><\/td>\n11.61<\/b><\/td>\n71.48<\/b><\/td>\n6.16<\/b><\/td>\n<\/tr>\n
2013<\/b><\/td>\n17.16<\/b><\/td>\n100.35<\/b><\/td>\n5.85<\/b><\/td>\n<\/tr>\n
2014(Jan to July)<\/b><\/td>\n9.77<\/b><\/td>\n59.77<\/b><\/td>\n6.12<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

As we can see from the table above, the exports of jeans to EU in 2010 was almost negligible but the volumes have picked up sharply in the last 4 years . In 2013 the volumes were about 17 million jeans<\/strong> and average price was Euro 5.85\/pc<\/strong> which has increased to over Euro 6 already<\/strong>. With the increased wages, we can expect further increase in this price.\u00c2\u00a0 Against this , the average price from Bangladesh for 2014 is Euro 5.34\/pc<\/strong> .\u00c2\u00a0 This difference of over 0.70 Euro might increase further and Cambodia might lose on some of its orders to other competing countries. Though Bangladesh and Cambodia cannot be strictly compared since Bangladesh is much bigger , but the comparisons are bound to occur.\u00c2\u00a0\u00c2\u00a0 The world average for export of jeans to EU in 2013 was Euro 7.48 per piece and is about Euro 7.59 till July this year. This gives some breathing room to Cambodia , but it has to be remembered that these prices include shipments from expensive exporters like Turkey, Tunisia etc also.<\/p>\n

When we look at the figures for US, we find that\u00c2\u00a0 the quantities peaked in 2010 <\/strong>and after that there has been a\u00c2\u00a0 fall in shipments to US.\u00c2\u00a0 Whereas in 2010 about 25 million pieces<\/strong> of denim apparel was shipped to US, in 2013 , the quantities are over 40% lesser showing that the country is no longer able to increase exports to US. The average prices at $8.97\/pc<\/strong> in 2014 is well over the world average of $8.10\/pc<\/strong>. This shows that Cambodia is already not very competitive when it comes to US exports and this is reflected in its declining exports. A further increase with an increase in wages could further increase the prices making it more difficult for the country to export.<\/p>\n\n\n\n\n\n\n\n\n
Year of<\/b> <\/b>
\nImport<\/b><\/td>\n		All Denim Apparel<\/b> <\/b>
\n(million pcs)<\/b><\/td>\n		Total Value<\/b> <\/b>
\n(million US$)<\/b><\/td>\n		Average Price
\n(US$\/pc)<\/b><\/td>\n<\/tr>\n
2010<\/b><\/td>\n24.5<\/b><\/td>\n183.64<\/b><\/td>\n7.49<\/b><\/td>\n<\/tr>\n
2011<\/b><\/td>\n20.54<\/b><\/td>\n177.04<\/b><\/td>\n8.62<\/b><\/td>\n<\/tr>\n
2012<\/b><\/td>\n17.51<\/b><\/td>\n145.74<\/b><\/td>\n8.32<\/b><\/td>\n<\/tr>\n
2013<\/b><\/td>\n15.59<\/b><\/td>\n132.30<\/b><\/td>\n8.49<\/b><\/td>\n<\/tr>\n
2014 (Jan to March) <\/b><\/td>\n3.2<\/b><\/td>\n28.74<\/b><\/td>\n8.97<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The above two tables do make it clear that Cambodia will focus more on Europe especially because it gets the GSP benefit to EU.\u00c2\u00a0 The volumes are continuously on the rise and are expected to increase further in the coming times. But labor cost will play a very large and a deciding role in its positioning.<\/p>\n

[\/private_special]<\/p>\n","protected":false},"excerpt":{"rendered":"

Cambodia had been witnessing a long unrest with unions fighting for over 70% increase in wages. After months of\u00c2\u00a0 discussions, unrest and problems, the govt. finally decided to increase the minimum wages by about 28%. The minimum wages in Cambodia had been US$100 and and unions had been fighting to increase them to $177 per […]<\/p>\n","protected":false},"author":1,"featured_media":18806,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[355,1271],"tags":[482],"class_list":["post-12874","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-denim-reports","category-subscriber-reports","tag-denim-reports"],"_links":{"self":[{"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/posts\/12874","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/comments?post=12874"}],"version-history":[{"count":0,"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/posts\/12874\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/media\/18806"}],"wp:attachment":[{"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/media?parent=12874"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/categories?post=12874"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.denimsandjeans.com\/recovery\/wp-json\/wp\/v2\/tags?post=12874"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}