Factory infections pose a threat to Thai exports

Factory infections pose a threat to Thai exports

Thai exports could fall by as much as 300 billion baht between August and December if the number of industrial factories hit by Covid-19 doubles, according to a key shipping body.

Chaichan Chareonsuk, chairman of the Thai National Shippers' Council (TNSC), said exporters are concerned about their prospects after Covid-19 infections have spread to at least 1,500 factories.

"We're afraid if infections spread to 3,000 factories, especially to the labour-intensive sectors of food, auto parts, electronic parts and textile sectors, Thai exports may drop by about 200-300 billion baht during the remaining months this year," he said.

TNSC estimates 20,000 factories are engaged in manufacturing for export.

Mr Chaichan said factories will be ordered closed and subject to quarantine for 14 days under bubble and seal measures if workers in the manufacturing sector test positive for the coronavirus. This results in suspension of production and delays in delivering products to importers.

He said exporters are worried about buyers' confidence if delivery schedules are missed, which could prompt importers to shift their purchase orders to other countries.

Under such a scenario, Mr Chaichan said overall Thai exports could be expected to grow only 7% this year.

In contrast, if the pandemic spread is controlled and the government works to tackle existing obstacles such as container shortages, high freight rates, a dearth of labour and the low supply of semiconductors, Thai exports could enjoy growth of up to 10% this year, he said.

"If the outbreak doesn't worsen in the remaining months this year, the council expects promising export prospects in the second half," said Mr Chaichan.

"There are positive factors for exports such as the strong global economic recovery, mainly in the US, China and the EU, as well as the weakening baht and rising oil prices, which are expected to settle at US$80 per barrel by the end of this year."

Ghanyapad Tantipipatpong, TNSC's honorary president and adviser, said the government should expedite the vaccine rollout to cover all sectors, especially exporting industrial factories.

She said the government should also adopt a single standard for public health measures, with the same operations in each province.

Ms Ghanyapad called for government support for factories with employees in high-risk areas.

She recommended state agencies accelerate work on e-document management and obtaining permissions and certificates for exports and imports through the National Single Window system to reduce exposure to government officials.

In the first half this year, Thai exports grew by 15.5% to $132 billion, while imports rose by 26.2% to $130 billion, resulting in a trade surplus of $2.44 billion.

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