$2.1B Thai gold exports to Cambodia ‘legal’, MTS says

$2.1B Thai gold exports to Cambodia ‘legal’, MTS says

Cambodia has become Thailand’s second-largest gold export market after Switzerland, generating around $2.1 billion in the first seven months. MoI

Synopsis: Given Cambodia’s relatively small economy and limited domestic demand for luxury goods, the surge in Thai gold exports suggests that Phnom Penh is emerging as a significant hub in the international gold trade.

Mae Thong Suk (MTS) Gold Group, a leading Thai gold trading firm, Friday defended the legality of Thailand’s surging gold exports to Cambodia, stressing that all $2.15 billion in transactions comply with international regulations.

The clarification was made by Kritcharat Hirunyasiri, Chairman of MTS Gold Group, following concerns raised by the Thailand’s Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) on Thursday, warning that rising exports may be linked to the unusual appreciation of the Thai baht.

According to the Thai media, gold exports to Cambodia have soared to around 68 billion baht ($2.149 billion) in the first seven months, placing Cambodia as Thailand’s second-largest gold export destination after Switzerland.

The MTS Chairman rejected the allegations, emphasising that all gold exports were conducted legally, did not involve illegal or unofficial grey market trading, and had no effect on Thailand’s currency.

Hirunyasiri clarified four key points regarding gold exports to Cambodia. First, MTS Gold Group confirmed that all shipments comply with international trade and customs rules, are processed through proper channels, and do not involve grey money.

Second, the Cambodian gold trader association verified that only three to four licensed dealers handle the trade. These dealers are legally authorised and fully compliant, ensuring all transactions are legitimate and not part of the alleged grey business.

Third, all Thai-Cambodian gold transactions are conducted in US dollars. This ensures that the exports do not affect the Thai baht, countering claims that the gold trade has contributed to currency appreciation.

Fourth, Thailand has become a regional gold hub. Over the past five years, exports, particularly to Switzerland and neighbouring countries, have grown, making shipments to Cambodia unsurprising and reflecting Thailand’s expanding role in the international gold trade, he said.

The MTS Chairman also criticised JSCCIB’s claims, saying that raising suspicions without verifying facts can create misunderstandings and negatively affect Thai gold traders’ reputation and business operations in the market.

He highlighted that JSCCIB itself supports establishing Thailand as ASEAN’s gold trade hub, and unfounded claims could undermine broader efforts to strengthen the country’s regional position in international gold trading.

Kritcharat reiterated that the baht currency’s appreciation is mainly driven by the weakening US dollar, not rising gold prices, and it is normal for the baht to strengthen as the dollar loses value.

The MTS Chairman noted that only three to four Thai gold traders currently export gold abroad, including to Cambodia, and the country’s ability to purchase and resell large quantities demonstrates its strong market capabilities.

He urged that such accusations should not cause misunderstandings or unfounded concerns about money laundering, emphasising the need to focus on facts and proper regulatory oversight rather than speculation.

For Cambodia, the surge in Thai gold exports highlighted the country’s growing importance as a regional trade partner, boosting its role in gold trading, financial services and cross-border commerce in Southeast Asia.

Given Cambodia’s relatively small economy and limited domestic demand for luxury goods, the surge in Thai gold exports suggested that Phnom Penh is emerging as a significant hub in the international gold trade.

Increased gold inflows created opportunities for banks, customs authorities and regulators to strengthen oversight, as well as for businesses seeking to profit from gold trading, retail and related services.

The trade may also bolster Cambodia’s foreign exchange reserves, since transactions are denominated in US dollars, aligning with the country’s dollarised economy.

However, the sharp spike has also raised questions about whether Cambodia has the capacity to regulate such volumes fully.