Government optimistic on exports

Government optimistic on exports

Shippers expect contraction for 2016

The government remains positive that exports will stay flat or eke out marginal growth this year despite an unexpected drop in October after two months of gains.

Pimchanok: Easing demand hits figures

The Commerce Ministry yesterday said exports fell by 4.2% year-on-year in October to US$17.78 billion after growth of 3.4% year-on-year in September and 6.5% in August.

Pimchanok Vonkhorporn, deputy director-general of the Commerce Ministry's Policies and Trade Strategies Bureau, blamed the export decline on easing demand from major markets and weaker shipments of gold and oil-related products.

The fall was also magnified by last year's high base, she said.

The ministry said exports of agricultural and agribusiness products slipped back to a contraction after gains in September, falling 8.1% from October last year to $2.63 billion due to lower shipments of sugar, rice, tapioca products and rubber.

Exports of industrial products fell for the first time in three months, down 2.7% at $14.15 billion, led by finished oil, computers, gold, automotive, steel and TV sets.

According to Ms Pimchanok, exports to mature markets -- the US, the EU and Japan -- fell by 2.1% in October, while those to dynamic markets such as Asean, China, South Asia, Hong Kong, South Korea and Taiwan inched up 0.3%.

In October, imports were 6.5% higher from the previous year at $17.53 billion, producing a trade surplus of $248 million.

For the 10 months of this year, exports totalled $178.25 billion, down 1% year-on-year, with imports shrinking 5.9% to $160.07 billion.

"We are still confident that exports will show growth in the remaining two months, as many factors are on the upside, such as farm product prices and oil prices," Ms Pimchanok said. "For the last two months, if we can fetch combined $36 billion, our exports may stay at zero growth this year."

Nopporn Thepsithar, president of Thai National Shippers' Council (TNSC), said that given the export performance in the first 10 months, it will be difficult for Thai exports to stay in a positive range.

"Normally, the export performance in November and December will be lower than October's, as most purchase orders have been made," he said. "Thai exports are most likely to average $17.4 billion a month in the fourth quarter, bringing 2016's export performance to 0.8% contraction. In the best-case scenario, exports could manage a contraction of about 0.5% if the exports fetch an average of $17.6 billion a month for the quarter."

Despite the gloomy outlook, Mr Nopporn said Thailand's exports are comparatively better than other countries, while the Thai private sector continues to make quality products such as cars, electronics and food.

The TNSC earlier this month raised its forecast to between zero growth and a 0.8% contraction for the full year from a previous prediction of a 2% contraction.

The council also predicts that exports will grow by 0-1% next year.

On Monday, the National Economic and Social Development Board predicted flat exports this year.

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