First-quarter exports to drop 9.2%, ministry says

A study by the ministry in cooperation with Thammasat University showed that exports would shrink in the first quarter before recovering in the second half of the year. Shipments dropped for two consecutive months at the end of last year from the same period in 2010, in November by 12 per cent and by 2 per cent in December, because of the floods.
Benjawan Ratanaprayul, director of the Commerce Ministry’s Bureau of Trade and Economic Policy, said the lingering impact of the disaster in combination with the EU’s and the United States’ economic slowdowns would affect Thai shipments greatly.
She said exports of both agricultural and industrial goods were forecast to drop significantly in the current quarter. Rubber exports are expected to drop by 15.07 per cent year on year, tapioca products by 19.8 per cent, electronics by 69.2 per cent, electrical appliances by 14.8 per cent, vehicles by 24.4 per cent, garments by 5.2 per cent, and plastic by 3.8 per cent.
However, the ministry projects that shipments will return to growth by the second quarter after many industries have resumed normal operation after the floods.
To deal with the severe drop in exports to the EU and the US in particular, Benjawan suggested that exporters explore new markets and focus more on domestic sales under the government’s policy to boost growth of the internal economy this year.
Thanit Sorat, vice chairman of the Federation of the Thai Industries, said overall exports this year would grow only 12 per cent, lower the government’s target of 15 per cent. He pointed out that many challenges would hit the export sector this year, including higher production and labour costs. The government should urgently show its efficiency to prevent a repeat of the flooding this year, or else exports would shrink seriously.