South Asia crisis threatens exports
Importers predicted to start hoarding
Escalating tension between India and Pakistan is expected to affect Thailand's exports in the short term, say senior ranking officials in the Commerce Ministry.
Banjongjitt Angsusingh, director-general of the International Trade Promotion Department, said importers are expected to ramp up their stocks because of the conflict between the neighbouring countries.
"Thailand's shipments both to Pakistan and India are mainly by ship, which are not affected by the mounting tension," she said.
Mrs Banjongjitt acknowledged that air cargo to Pakistan may be hit in the short term after all flights in Pakistan's airspace were cancelled amid rising tensions with India.
She said it's fortunate that the export value of Thai products using air cargo services to Pakistan is insignificant.
In a related development, Auramon Supthaweethum, director-general of Trade Negotiations Department, said the airspace closure by Pakistan is also unlikely to affect free-trade agreement (FTA) negotiations between Thailand and Pakistan.
She said the negotiations are expected to be concluded some time next year.
Since 2015, Thailand and Pakistan have negotiated the trade pact for nine rounds and concluded almost all chapters of the pact.
Thailand-Pakistan FTA negotiations have concluded the tariff reduction modality. The two countries aim to sign the FTA pact by the middle of next year.
Mrs Auramon said negotiations could take place via video conference.
Pakistan is Thailand's second-largest trading partner in South Asia after India and 38th globally.
Two-way trade between Thailand and Pakistan totalled US$1.68 billion in 2018, with exports from Thailand amounting to $1.48 billion and imports from Pakistan worth $200 million.
Key exports from Thailand were cars, chemicals, plastic pellets, steel and man-made fibres.
Two-way trade between Thailand and India was worth $12.5 billion in 2018.
Exports made up $7.6 billion and imports from India were worth $4.86 billion.
Key export products were plastic pellets, chemicals, air conditioners, machinery and steel.