Mild growth in sight for 2020

Mild growth in sight for 2020

Weaker baht a silver lining amid outbreak

The government remains upbeat on overall exports staying positive this year despite myriad negative factors, including the deadly coronavirus outbreak.

Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, said the office still forecasts exports will grow 0-2% this year if shipments average US$20.6-21 billion a month.

A weakening baht may improve price competitiveness for some products, while the trade missions to boost exports set up by Commerce Minister Jurin Laksanavisit in South Africa, the Middle East, Russia, Britain, Germany, Australia, Vietnam, Cambodia, Bangladesh and India this year will help boost export growth, she said.

For long-term trade strategy the Commerce Ministry also aims to conclude ongoing free trade agreement (FTA) negotiations with Turkey, Pakistan and Sri Lanka, as well as prepare for potential FTA negotiations to capitalise on trade opportunities through more comprehensive partnerships, said Ms Pimchanok.

Yesterday, the ministry reported customs-cleared exports rose 3.35% year-on-year in January, fetching $19.6 billion. This was the first rise in six months, largely driven by higher shipments of oil and gold.

Ms Pimchanok said the export direction reflects positive sentiment from the phase 1 deal between the US and China.

Exports related to US-China tariff measures such as computers and components expanded in both the US and China markets. Additionally, many rising segments continued to expand favourably, such as chilled and frozen chicken, pet foods, canned and processed fruit, food condiments, milk and milk products, beverages, motorcycles and parts, furniture and parts, cosmetics, soaps and skincare products, she said.

Nonetheless, excluding gold and oil, Thai exports in January 2020 contracted 0.6% from the same month of last year.

In January, imports decreased by 7.86% to $21.2 billion thanks to a high base of weaponry imports for military exercise in January last year and a decrease in gold imports.

Excluding golds, oil and weaponry, imports in January 2020 fell 0.17%.

Imports of capital goods expanded 5.8%, particularly for machinery and components, which registered the highest growth in two years at 18.7%.

Shipments to the US and China, both major trading partners, grew favourably at 9.9 and 5.2%, respectively.

Exports to Taiwan and the Middle East strengthened the upward trend and increased by 13.1% and 2.0%, respectively.

According to Ms Pimchanok, exports of agricultural and agro-industrial products decreased by 6.3% to $3 billion in January led by rice (-34.0%), fresh, frozen, and processed fruit (-20.3%), cassava products (-16.6%), frozen and processed shrimp (-28.7%).

Industrial products increased 5.2% to $15.7 billion, propelled by gold (+300%), motorcycles and parts (+35.4%), furniture and parts (+29.9%) and cosmetics, soap, and skincare products (+13.8%).

According to Ms Pimchanok, exports to most trading partners showed a slight recovery. Exports to the US and EU (15 countries) expanded 9.9% and 0.6%, respectively, with exports to Taiwan recording positive growth for the seventh consecutive month at 13.1%.

Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers' Council (TNSC), said January's shipments were boosted by higher purchase orders during Chinese New Year, while the coronavirus outbreak had yet to impact export activities. The TNSC projected exports will grow 0-1% this year mainly on baht weakness.

Do you like the content of this article?