Thai shippers have downgraded the country’s export outlook to a 10% contraction, deeper than the previous forecast of an 8% drop, with the finger pointed at the coronavirus crisis and the strong baht.
Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers’ Council, said weakening purchasing power and the ailing economies of key trading partners were key components in the TNSC’s export forecast cut.
“The spread of the Covid-19 pandemic hit almost all sectors hard and led several countries worldwide to embark on lockdown measures,” Ms Ghanyapad said.
“Demand from trading partners and domestic supply and production have yet to recover, particularly for industrial products such as automobiles, while international logistics have yet to resume normal operations. More importantly, there is still a risk of a second wave of the pandemic.”
Mrs Ghanyapad said the baht is also strengthening, making Thai products less competitive while oil prices remain relatively low, affecting the performance of oil-related products, chemicals and plastic pellets. Meanwhile domestic drought remains widespread.
The council expects global oil prices to stand at an average of US$40-42 per barrel this year from $60-65 a barrel last year.
According to Ms Ghanyapad, a handful of Thai products still see promising prospects such as processed agricultural products, food, fruits and canned processed food.
The group will send a letter to the prime minister, asking the government to help keep the baht at 34 baht per US dollar from 31.12 baht now.
“The baht has gained very fast, faster than the currencies of any Asean peers, making Thai exports less competitive and affecting overall exports,” she said.
Thailand’s customs-cleared exports fell 22.5% year-on-year in May to $16.3 billion, the lowest in four years, attributed to the global economic slowdown caused by the pandemic. Excluding gold, oil and weaponry, exports dipped 27.2% from May last year.
Imports dropped by 34.4% in May to $13.6 billion, resulting in a trade surplus of $2.69 billion. For the first five months of 2020, exports contracted 3.71% to $97.9 billion, while imports dropped 11.6% to $88.8 billion, a trade surplus of $9.09 billion.
Ms Ghanyapad said the group foresees the country’s export performance in the remaining months will become negative in every month.
Visit Limlurcha, vice-chairman of the TNSC, said the pandemic has brought on a serious economic convulsion, as indicated by the contraction of Thai exports to almost every destination except China, thanks to the mainland’s eased lockdown measures and higher fruit exports.