Exports are unlikely to escape contraction this year if December's performance comes in below US$19 billion, says the Commerce Ministry.
"If the country's export value in December reaches $19.3 billion, we'll see flat growth. If it comes in at $19 billion, we'll see a 0.1% contraction, and if it stays equal to $18.5 billion as reported a year earlier, we will see a 0.4% drop at the end of this year," said Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department.
The Commerce Ministry yesterday reported lower-than-expected export figures for last month, shrinking 1% year-on-year to only $18.6 billion after hitting a 21-month high in October, which rose by 3.97% year-on-year to $20.2 billion.
The contraction was due mainly to shrinking major farm products, notably rubber and finished oil.
The shipments of finished oil dropped sharply to 1.49 billion litres worth $835 million last month from 1.59 million litres worth $1.26 billion reported in November 2013.
Meanwhile, Thailand's exports of farm products fell by 7.5% to $2.77 billion, mainly rubber, shrimp, frozen seafood and chicken.
However, shipments of industrial goods managed to increase by 2.7% to $12.3 billion, mainly TV sets, air conditioners, automobiles and plastic pellets.
With finished oil excluded, Thailand's exports still showed signs of strong recovery, expanding by 1.4% in November, said Ms Nuntawan.
"The oil price slump has substantially affected finished oil exports, although the export volume had not dropped much," she said, citing the average oil prices stood at only $80 a barrel last month against $108 per barrel in November 2013.
Imports also fell by 3.46% year-on-year last month to $18.6 billion, leading to a trade deficit of $78 million.
For the first 11 months of this year, exports dropped by 0.42% year-on-year to $209 billion, with imports totalling $211 billion, down by 8.99%, for a trade deficit of $1.56 billion for the period.
Benjarong Suwankiri, head of TMB Analytics, said based on November's figures it was highly likely that the country's overall exports would see a contraction of 0.5% for the full year.
"Shipments, particularly in the farm sector such as rubber and fishery, have been hit hard this year," he said.
"It's still fortunate the performance in all markets in Asean remains good, and this region is expected to become the main destination that Thai exports can count on next year."
TMB forecasts exports to grow by 3.5%, significantly below the 4% forecast by the Commerce Ministry.
"Next year, we must be cautious about Europe and Japan, whose economies have yet to recover," Mr Benjarong said.
"But the most thorny issue will be geopolitical conflicts, as the oil issue may bring about regional strife."