Food exporters coping with strong baht
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Thai food exporters are struggling to maintain competitiveness by keeping prices steady, suspending shipments to some new markets, focusing on new, innovative products, trading in a higher variety of currencies and slowing plans for converting them to bah
At a press conference on “Thaifex: World of Food Asia 2013”, which will be held from May 22-26, exporters expressed worry that their business would not grow this year because of lower returns in baht.
“Although food export is expected to grow by 10 per cent in terms of US dollars, Thai food producers will generate lower incomes when converting to baht because it strengthened too much during the first quarter of the year,” said Chatchai Boonyarat, vice chairman of the Thai Chamber of Commerce.
Last year, Thai food export grew by 8.1 per cent to US$18.4 billion (Bt539 billion).
He said food exporters were trying to maintain business growth by introducing new products and quoting new prices as they could not charge more for existing goods for fear of losing customers.
Chatchai projects that the baht could end up at 28 against the greenback by the end of this year. But the most preferable exchange rate for exporters is Bt30 to the US dollar.
Lower returns
With the baht’s current value, Chatchai said small and micro-sized enterprises were suffering seriously from losses due to lower returns in baht.
Arnat Mongkornhong, foreign trade manager and marketing coordinator of Delicup Co, a producer of jelly snacks, said his firm was expecting growth of only 10-15 per cent this year, compared with normal growth of 40-50 per cent, because of the baht’s appreciation.
“Because of the stronger baht, the company has faced difficulty increasing prices and exporting products to 16 new markets where we have already launched marketing plans. The firm has to suspend some lots of exports or face huge losses,” Arnat said.
The company last year spent Bt5 million on a marketing campaign in Myanmar. But now, it needs to suspend export because of the baht’s strength. It cannot quote new prices after already setting them last year.
He said he also had to delay plans to convert US dollars into baht, instead changing them to other currencies while the Thai unit fluctuates.
He called on the government to keep the currency stable and ensure stable economic growth.
Suwipan Thisyamondol, deputy director-general of the International Trade Promotion Department, said Thai food export this year was expected to grow by 10 per cent in dollar terms. However, the value in baht could be lower than last year.
