Exports continue their plunge

Exports continue their plunge

Trend showed no signs of a let-up last month

Exports tumbled for a fifth straight month in May, casting doubt on whether shipments will help to boost the economy this year.

The Commerce Ministry yesterday said shipments fell by 5% year-on-year to US$18.4 billion last month.

In the first five months, exports reached $88.7 billion, down 4.2% from the year-earlier period.

May exports of agricultural goods fell by 2.8% year-on-year to $2.97 billion, in line with the downward trend in global farm prices, particularly for rubber, whose shipments fell by 14.4% to $370 million.

Sugar shipments fell by 22.8% to $250 million on the month, while shrimp exports slid 16.9% to $111 million.

May industrial exports plunged 4.5% to $14.3 billion due mainly to automotive and parts shipments, which fell by 6.8% to $2.46 billion. Oil and related products showed weakness as well.

The decline in automobile and parts shipments was driven mainly by pickup exports, which fell by 19.3% to $4.32 billion.

But Somkiat Triratpan, director of the Commerce Ministry's Office of Trade Policy and Strategy, sounded an optimistic note, saying Thailand was fortunate to maintain market share in major territories such as the US, China, Japan, India, the Philippines, Malaysia, Hong Kong, South Korea, Australia and Taiwan.

Thailand's contraction rate is relatively low compared with countries such as Australia, France, Singapore, Japan, the US and South Korea, he said.

The ministry is maintaining its full-year forecast for export growth at 1.2%, anticipating a better performance in the second half.

On the other side of the ledger, Thai imports fell by 20% last month to $16 billion, their biggest decline on an annual basis since August 2009.

For the first five months, imports fell by 9.39% year-on-year to $85.4 billion.

Roong Mallikamas, the Bank of Thailand's senior director of macroeconomic and monetary policy, said last month's 5% export drop was less than expected.

The central bank is maintaining its forecast of a 1.5% contraction in exports this year.

That implies shipments will not be a significant driver of economic growth as long as the global recovery remains tepid and Thailand's problems with export quality development persist.

Mrs Roong said May's sharp import decline marked an across-the-board contraction in all segments, especially crude oil, whose price was far higher a year ago.

"Low levels of imports in other segments indicate the recoveries in the domestic economy and exports remain slow," she said.

Tim Leelahaphan, Maybank Kim Eng Securities' Thailand economist, said it was unlikely that exports would help the economy this year, given various uncontrollable global factors.

"While some mention the strong baht as one of the reasons for weak exports, our outlook is the baht will not be strong with the prospect of a Fed rate hike later this year," he said.

Do you like the content of this article?
COMMENT (1)