Thai private sector monitoring Ukraine war, concerned at rising shipping costs
Thailand’s private sector is setting up a working group to monitor the Russia-Ukraine war’s effects, amid concern over a prolonged impact on Thai trade. Meanwhile, the government has agreed to press China to open alternative routes for Thai exports to Central Asia and Europe as shipping costs rise.
Federation of Thai Industries chairman Suphan Mongkolsuthree said the new monitoring group would alert the private sector to closures of airspace, shipping lines and effects of sanctions, Bangkokbiznews reported on Sunday.
The move comes amid concern that the Ukraine-Russia conflict will last for months or even years, taking a heavy toll on the world economy. Severe sanctions imposed on Russia by Western countries and their allies have not been effective in halting the conflict.
A core worry for Thailand is the rising price of oil, which has already exceeded US$110 per barrel and is forecast to slow Thai growth this year.
However, the effects on Thailand’s export sector will be minor – Russia accounts for just 0.38 per cent of Thai exports and Ukraine only 0.04 per cent.
Impacts should be limited to the automotive, processed food, jewellery, and cosmetics sectors, all of which export to Ukraine and Russia.
The Thai Chamber of Commerce (TCC) has expressed worry over shipping.
TCC chairman Sanan Angubolkul said shipping costs are rising as Russia-Ukraine routes close and insurers refuse to cover transport risks. Exporters have been forced to switch to land or rail transport for goods that would normally travel via the affected routes, he added.
Thai National Shippers' Council chairman Chaichan Chareonsuk urged the government to negotiate with China to open land and rail routes for Thai exports to Central Asia and Europe. The Commerce Ministry said it would ask China to open routes to Central Asia and Europe under World Trade Organisation rules.