Exporters more optimistic in second half as baht stabilises

On the first day of “Thaifex: World of Food Asia 2013” at Muang Thong Thani yesterday, Isara Vongkusolkij, chairman of the Board of Trade of Thailand, said exports in the second half should expand as fluctuation of the baht was relieved, while enterprises should be able to adjust to a stronger currency.
“Exporters always want to see a weakening baht. However, as a matter of fact, the Thai economy has grown strongly, so the baht will not be as weak as [hoped]. However, the government and the Bank of Thailand should be able to ensure a stable currency in the second half after it has fluctuated too much since early this year,” Isara said.
To ensure continued export growth, private enterprise hopes for a baht worth around 29-30 against the greenback.
Isara said that because of the baht’s appreciation, export of foods and agriculture goods had been hit hardest since early this year.
The volume of exports did not drop in the first four months of the year but the return on baht was lower, and that reduced profit for Thai exporters. He said small and medium-sized enterprises were the first group to feel the worst impact. However, they could not increase prices, or they would lose competitiveness – and customers – to rival countries.
Gerhard Winkler,  a food trader visiting Thaifex, said Thai food products still enjoyed high acceptance among consumers because of high quality and good taste. However, with the stronger baht, if Thai exporters were to increase retail prices, it would certainty affect buyers and customers.
His company may need to shift orders to other countries that have lower costs.
Somjin Plengkhum, executive director of the Thai Trade Centre in New York, said most higher-value-added foods had not been affected by the baht’s strength as they could be priced high enough to cover costs. However, some foods and commodities have been affected by the stronger baht because they could not increase retail prices to American buyers.
She said Thai shipments to the US had started to recover, with exports growing by 2.6 per cent in the first quarter. Export to the US is projected to grow by 5 per cent for the full year, in line with rising economic performance in that country.
Srirat Rastapana, director-general of the International Trade Promotion Department, said food exports should grow strongly this year, despite the stronger baht.
The food industry creates about US$20 billion (nearly Bt600 billion) in annual revenue for the country. In the first quarter of this year, food exports grew 3.6 per cent over the same period of 2012 to $4.4 billion.
At Thaifex 2013, many foreign and Thai buyers have shown high interest in the event, which will be held until Sunday.
More than 3,600 leading food producers and traders from Thailand and around the global are exhibiting at the event. The fair is projected to attract more than 93,000 international visitors.