Shippers see 1% hit to Q1 China exports

Shippers see 1% hit to Q1 China exports

The coronavirus outbreak is likely to trim Thai exports to China by 1% in the first quarter of 2020 to about US$2.5 billion, according to joint estimates of the Thai National Shippers' Council (TNSC) and the Commerce Ministry.

Speaking after a war room meeting with senior ministry officials to evaluate the export impact of the virus outbreak, TNSC chairwoman Ghanyapad Tantipipatpong said declining shipments stem largely from a delay in deliveries and lower production in China because of the outbreak.

According to Ms Ghanyapad, key export segments feeling the pinch from supply chain disruption in China include electronics; automobiles; rubberwood; fresh, chilled and frozen fruit and vegetables; plastic pellets; rubber products; computers and components; and chemical products.

"Although the Chinese government has permitted factories to reopen their production since Feb 10, only workers who stay in areas close to their factory can come back to work," she said.

"And with the government strictly ordering all Chinese people to wear face masks under threat of harsh penalties, and the drastic shortage of face masks in the mainland, certain factories have failed to procure enough masks for workers and are unable to reopen."

It will take at least six months for certain industries in China to resume full production, Ms Ghanyapad said.

She cited the rubberwood furniture industry in Guangzhou, where production has shut down until April or possibly May.

Thai rubberwood exports fetched about 60 billion baht last year.

"The TNSC expects the virus impact to lower Thai exports to China by 1% in the first quarter, but the figures are likely to turn around healthily in the remaining quarters once the situation improves," Ms Ghanyapad said.

The council has yet to make a prediction on shipments to China this year, saying only it must wait and see about the performance in January.

Thailand last year recorded $40.9 billion worth of exports to China (including Hong Kong), down 4.6% from the year before.

Key export products included computers and parts; plastic pellets; gems and jewellery; electrical circuits; rubber products; fresh, frozen and dried fruit; chemicals; rubber; tapioca products; and automobiles and parts.

The TNSC has maintained its overall export growth forecast for this year at 0-1%, reaching up to $251 billion.

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