Exports risk 8% plummet as outbreak hits supply chains
Exports risk shrinking by up to 8% this year as the pandemic ravages global supply chains and economies, says an exporter group.
Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers' Council (TNSC), said the country's export performance will become aggravated if the baht stays at an average of 30.50 baht against the US dollar.
But positive factors still exist, such as rising online transactions, especially for daily use and medical products; the continuous depreciation of the baht; and jittery financial markets and economies thanks to growing global concerns about the pandemic, she said.
Oil prices have decreased since the beginning of the year, thanks to lower demand as the oil price war between Saudi Arabia, Russia and the US results in lower logistics and production costs.
"The risk factors are the world's supply chain disruption, both for non-essential and essential goods, as many countries have introduced quarantine and lockdown measures to control transport," Ms Ghanyapad said. "Higher unemployment, mass layoffs and leave-without-pay measures are also anticipated."
She said the council will submit proposals to government agencies and related trade associations to help shore up the country's export activities and financially support exporters amid the coronavirus pandemic.
The proposals will cover short-, medium- and long-term measures not only for financial assistance, but also labour, raw material imports and export products, logistic services, transport and marketing.
The TNSC urged the government to clarify import-export procedures and logistics systems if it needs to upgrade the curfew measures to cover 24 hours nationwide.
If manufacturing factories cannot operate, the country's overall export activities will be gravely affected and incur heavy damage to the overall economy, the council said.
Visit Limlurcha, vice-chairman of the TNSC, said exporters are concerned about the current widespread drought, calling on the government to declare the drought a national disaster and provide rapid relief measures to farmers and operators.
"It's the worst drought in 40 years, and the volume of water in the country's four major dams is only 16% left for farming use, causing supply of farm products to the market to drastically fall while factories will face a short supply of raw materials such as rice, sugar, tapioca, corn, pineapple, palm and longan," he said. "If the government declares the drought a national disaster, exporters will have a proper reason to bargain with importers for late shipments or adequate products."