Exports contracted last month, due in large part to a sharp drop in agricultural processing product shipments, causing the performance in the first quarter to shrink 1% from the same period last year.
According to Srirat Rastapana, permanent-secretary of the Commerce Ministry, exports in March fell 3.12% year-on-year to US$19.94 billion. Shipments in the first quarter were worth $56.21 billion, down 1% from the same quarter last year.
Shipments of agricultural and agro-industrial products fell 8.2%, driven by a 25% drop in frozen and processed shrimps, a 21% decrease in rubber exports due to high global supply and tepid demand from China, Malaysia and Japan, and a 21% decline in sugar.
Rice exports managed to increase by 6.2% for the month mainly because of lower Thai rice prices on par with other rice exporters.
Imports last month fell 14.19% to $18.48 billion, the eighth straight month of contraction, on lower raw materials orders.
For the first quarter, exports were down 1% to $56.21 billion, while imports decreased 15.41% to $55.5 billion.
Despite a contraction in the first quarter, Ms Srirat said the ministry remains optimistic that exports will recover to grow 5% this year on the back of global economic expansion, higher prices of raw materials and a weak baht. However, the country’s months-long political crisis continues to pose risks to export growth, she said.
The ministry expects 4-4.5% growth in exports in the second quarter and 7-9% growth in the second half of the year.
Panyapiwat Institute of Management president Sompop Manarungsan said the drop in exports in the first quarter is an early warning that it will become tougher to rely heavily on exports.
"We must pay serious attention to raising income from the service sector and promote domestic consumption," he said.
He also attributed slack shipments to lower imports and exports from China, a key node in the global supply chain.
"China itself is now in a transitional period, focusing more on promoting domestic consumption, increasing income from the service sector, and boosting investment in infrastructure, as well as reducing reliance on exports," said Mr Sompop. "The government’s plan to boost exports this year to 5% is thus hard to achieve."