Export outlook still rosy

Export outlook still rosy

Uptick of 10% in January has officials hopeful of gain in 2024

A ship carrying containers motors along the Chao Phraya River, past Bangkok Port. (File photo)
A ship carrying containers motors along the Chao Phraya River, past Bangkok Port. (File photo)

Following a quicker uptick in exports than expected in January, the Commerce Ministry expects continued expansion, driven by the global economic recovery, easing of worldwide inflation, food security measures pushed by several countries, and tightened regional economic cooperation.

Permanent commerce secretary Keerati Rushchano said exports are likely to remain positive in the first quarter of this year, barring any escalation of geopolitical tensions in the Middle East.

The ministry maintained its export growth target of 1-2% this year, with monthly shipments valued at US$24 billion to 24.36 billion, said Mr Keerati.

"Positive factors are expected to continue with the recovery of trading partners' economies as global inflation slows. Food security measures introduced by several countries should also contribute to increased demand for agricultural and food products," he said.

"As for geopolitical tensions in the Middle East, there hasn't been a significant impact on Thailand, but monitoring is essential as a broader conflict may have negative repercussions. In addition, uncertainties surrounding shipping costs, despite some reduction from the peak, and exchange rate fluctuations are other factors to watch."

The ministry reported on Friday that customs-based exports rose for a sixth straight month in January, up by 10% year-on-year to $22.7 billion (785 billion baht).

Thai exports in the real sector (excluding gold, oil-related products and weaponry) grew by 9.2% year-on-year.

Imports increased by 2.65% in January to $25.4 billion, resulting in a trade deficit of $2.76 billion.

Exports of agricultural and agro-industrial products increased by 9.2% year-on-year in January to $3.71 billion, led by rice (+45.9%), fresh, chilled, frozen, and processed chicken (+5.0%), rubber (+5.5%), fresh, chilled, frozen, and dried fruit (+30.1%), canned and processed seafood (+5.2%), pet foods (+9.1%), drinks (+18.6%), canned and processed fruit (+23.3%), sauces and preparations (+23.3%), canned and processed vegetables (+33.1%), and fresh, chilled, frozen, and dried vegetables (+15.3%).

Industrial product exports expanded by 10.3% to $18.1 billion, with key products comprising computers, equipment and parts (+32.2%), iron, steel and products (+106%), rubber products (+3.7%), gems and jewellery (excluding gold) (+21.5%), machinery and mechanical components (+7.6%), and telephones, equipment and parts (+56.3%).

"Thai exports continued to expand, in line with many other countries in Asia and the direction of global trade. This growth was attributed to the alleviation of global inflation, coupled with a low base value for exports in January 2023," said Mr Keerati.

"In addition, there was momentum from the shipment of computers and electronic components, as well as the recovery of the electronics industry. The export of agricultural and food products also continued to expand significantly. However, uncertainties related to geopolitical issues could pose trade challenges in the future that need to be monitored."

Chaichan Chareonsuk, chairman of the Thai National Shippers' Council, said Thai exports are gradually improving because of reduced freight rates, as demand for shipping declined after the Chinese New Year holiday period.

If geopolitical tensions in the Red Sea do not escalate further, it is expected that within 1-2 months, freight rates may return to normal, he said.

For example, rates to Europe had increased from $1,100 to $4,000-5,000 per container, but have now decreased to $2,500 per container, said Mr Chaichan.

However, rates remain higher than before the attacks in the Red Sea, he said.

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