Chaichan Charoensuk, president of the Thai National Shippers’ Council, said the council has been closely monitoring the fighting between Russia and Ukraine and the economic sanctions imposed on Russia.
Chaichan said the fighting and retaliation against Russia would definitely affect the global and Thai economies and production costs would definitely increase due to the rising prices of oil and raw materials.
He said the materials that would be affected include steel, grains and semiconductors and their rising prices would lead to a reduction in purchase orders.
The council expects that if fighting does not escalate but ends through negotiations within three months, Thailand’s exports would still grow at five per cent.
Chaichan said the first quarter would see 5 per cent growth of exports, valued at US$67 billion to $68 billion, because Thai exporters have already received orders.
But, he said, if the fighting prolongs, exports in the second quarter would be affected and the export value might drop by $4 billion or $5 billion. The products that would be affected would be vehicles, auto parts, tyres and electric appliances, especially air-conditioners.
Chaichan said the export value in the second quarter would be around $6.6 to $6.8 billion if the fighting prolongs and there would be no growth compared to the same period last year.
The council expects that if the fighting continues, global oil prices would be around $100 to $105 per barrel and the prices would rise in the second quarter, pushing up freight costs. He said shipping expenses would go down after July or by the year-end.
He said the council also believes that banning Russia from the SWIFT international bank link system would have an impact on the global financial system. The impact would be clearer in the second half but Thailand would only be indirectly affected because the kingdom’s trading value with Russia is not high, Chaichan added.
Published : March 01, 2022