Thai export value slides again, full-year growth now expected at 0.5 to 1 per cent

August exports slumped for the second consecutive month to lowest value in 32 months, and down 7.4 per cent year on year, to US$18.94 billion (Bt612.7 billion).

“Exports are still dropping more than expected because economic growth in many markets has not yet recovered and demand is lower than expected. Lower prices for many farm crops and declining shipments of gold and fuel are major factors bringing down export volume and value,” said Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department.

She said the ministry would officially announce a lower 2014 export-growth forecast next month after a meeting between Commerce Minister Chatchai Sarikulya and overseas Thai trade officials. Because of declines in the first eight months, full-year export growth is now expected to be only 0.5-1 per cent. 

At the upcoming meeting, the ministry and exporters will also brainstorm on how to revive the sector next year.

Exports in the first eight months of 2014 were down 1.36 per cent year on year to $150.54 billion, so the ministry now accepts that the previous growth projection of 3.5 per cent is unobtainable. For a full-year growth rate of 0.5 per cent, exports in the remaining months will need to average at least $19.7 billion. August exports were kept low by external factors. The International Monetary Fund’s Export Price Index dropped by 1 per cent in the first eight months of the year, reflecting low demand in the world market. The IMF’s Agricultural Price Index shrank 2.8 per cent, and the Industrial Price Index dropped 2.9 per cent.

Prospects for economic recovery in many major markets remain uncertain, mainly China, Japan, the United States and the European Union. In the first eight months, the value of Thailand’s rubber exports plunged by 20 per cent to $4.21 billion, sugar export dropped 22.4 per cent to $1.79 billion, and shrimp export dropped 17.3 per cent to $1.07 billion.

Industrial exports also contracted in the first eight months – construction materials by 16.2 per cent to $5.46 billion, televisions and parts by 1.3 per cent, and refrigerators and parts by 3.3 per cent.

 

Overseas demand weakens 

In the first eight months, demand for Thai merchandise weakened in many markets, such as by 1.6 per cent in Japan, 5.4 per cent in China and 18 per cent in Australia, as well as in Asean by 2.5 per cent. 

Last month alone, exports to other major markets also dropped again, by 0.3 per cent to the United States and 5.4 per cent to the EU, despite the fact that some exporters have accelerate shipments before the expiration of tariff privileges in the latter market.

Imports in August declined for the 13th straight month by 14.17 per cent to $17.79 billion. The first eight months saw a 12.69-per-cent slide to $150.26 billion. These figures left Thailand with a trade surplus of $1.14 billion in August and $280.8 million in the first eight months of the year.

The value of gold imports and exports last month plummeted because of a severe drop in the metal’s global price. Gold exports dropped 92.9 per cent ($956 million). Oil exports also dropped by 16.1 per cent ($226 million).

Vallop Vitanakorn, vice chairman of the Thai National Shippers Council, said exports this year could face flat growth because many markets had not yet shown clear signs of recovery. Next year, Thailand should also beware of slower economic growth in Japan as its government plans to raise the consumption tax again, likely causing lower purchasing power.