Thai exports are unlikely to achieve expected growth of 5% this year, as prolonged political protests have started taking a toll on purchase orders and potential new customers.
A Chinatown shop owner checks decorations for the Year of the Horse beginning Jan 31. THANARAK KHOONTON
Paiboon Ponsuwanna, director of the Thai National Shippers' Council, which represents nearly 3,000 exporters and shippers, yesterday said there are signs of decreasing purchase orders at a time when potential buyers usually prepare orders and traders fly to visit factories or observe new products in Thailand.
He said most small and medium-sized traders have visited Bangkok and negotiated new orders as usual, but large companies are still reluctant to allow their executives to visit Thailand, as they are worried about the political protests.
"Traders may have now shifted to make orders with other countries due to a lack of confidence in Thai supplies thanks to escalating political demonstrations," Mr Paiboon said.
He said the effect on shipments will be insignificant if the protests end this month, allowing exports to grow by 5%.
But if the protests continue into next month, that will put more pressure on export performance and cause shipments to miss their target.
Exports contribute more than 60% of Thailand's gross domestic product.
The National Economic and Social Development Board forecast export growth of 7% this year from expected flat export growth last year.
In the first 11 months of 2013, exports slipped 0.49% year-on-year to US$210 billion.
Mr Paiboon said it is fortunate that purchase orders from Japan are expected to increase in the first quarter.
However, Thanit Sorat, a vice-chairman of the Federation of Thai Industries, said the outlook for exports remains promising due to the recovering economy and improving unemployment rate in the US and the improving economic climate in China and Japan.
He said exports will gradually recover, with a clear direction expected in March or April.
Mr Thanit remains upbeat that exports will grow by 5% this year, saying export procedures are still moving as usual despite the Bangkok shutdown, as most factories are located outside the capital and shipments are handled via Laem Chabang port.
As long as the protests are limited to Bangkok, export procedures will be affected only slightly, he said.
The recent occupation of the Customs Department by the People's Democratic Reform Committee also had no effect on export-import procedures, as the department has opened offices at Suvarnabhumi airport and Klong Toey port.
Mr Thanit, also chairman of the logistics operator V-Serve Group, brushed aside concerns by academics regarding weakened confidence among foreign companies in product supply and transport by Thai manufacturers.
He said he has monitored 400-500 clients of his company, and there are no signs of logistical difficulties.
Korpong Boonyakarn, a specialist economist at TMB Bank, said Thai exports have now rebounded from the point of lowest growth but have yet to experience a full recovery.
Export orders are still registering moderate growth, he said, adding that the political turmoil has caused sentiment concerns rather than a decline in exports.
TMB forecasts export growth of 4.5% this year, down from 5% projected earlier.
Mr Korpong said economic recovery in major economies such as China, Europe and the US is viewed as a boon for Thai exports.
Pimonwan Mahujchariyawong, managing director of Kasikorn Research Center, said export growth this year is projected at 5%, down from 7%, in the best-case scenario.