May saw a drop in exports for the third consecutive month by 2.14% year-on-year to US$19.4 billion, bringing down the value of the first five months by 1.22% to $92.9 billion.
The Commerce Ministry attributed the decline to weak global farm prices, particularly rubber, tapioca products and rice, as well as the falling shrimp supply due to the lingering effects of early mortality syndrome, which plagued shrimp farms last year, said Nantawan Sakuntanaga, director-general of the International Trade Promotion Department.
A decline in the farm sector led to a contraction in the export value of agriculture and agribusiness products in the first five months by 6.4% year-on-year to $14.6 billion.
Exports of industrial goods showed a slight increase over the same period, with 1.6% growth to $60.9 billion thanks to a rise in shipments of electronic goods, electrical appliances, computer parts and plastic products.
Imports plunged by 9.32% to $20.2 billion in May and 14% to $94.4 billion in the first five months of the year, bringing the total trade deficit to $1.55 billion.
Ms Nantawan said although exports have been shrinking the past three months, there were signs of improvement in the second half of the year, ensuring the ministry will maintain the growth projection at 3.5% on top of the export value fetched last year, 6.91 trillion baht or $237 billion.
Recovery in both the US and the EU and higher prices of industrial goods as well as the weak baht are positive conditions, she said.
Ms Nantawan said to achieve 3.5% export growth, the value of shipments for the second half of the year must expand by at least 5% to $20 billion.
She said the US State Department’s downgrading Thailand to Tier 3 in its 2014 “Trafficking in Persons” report has yet to affect exports, while the EU’s recent decision to curtail diplomatic ties with Thailand is not a trade boycott.
However, economist Sompop Manarangsan disagreed. He said exports this year might not reach the target, as the moves by the US and the EU would have a significant impact on exports this year.
Mr Sompop suggested Thailand boost ties with China and Japan. China could help to increase exports, while investment by Japan is key to driving the economy.
The fall in exports, especially in the first quarter, did not stem from local politics but a slowdown in the global economy, caused by a sluggish US economy and a drop in Chinese exports to the US, he said.