Customs-cleared exports fell for a third straight month in January, dragged by the global economic slowdown, the US-China trade war and the strong baht.
The Commerce Ministry reported yesterday that Thailand's outbound shipments contracted 5.7% year-on-year last month to US$18.9 billion.
Exports in baht terms fell by 5.7% year-on-year to 616.104 billion baht.
On the import side, value in January increased 14% to $23 billion, resulting in a trade deficit of $4.03 billion, the highest since January 2013.
The main reason for the import surge was the importation of $2.133 billion worth of arms for military drills related to the recent Cobra Gold exercises with the US military.
Agricultural and agro-industrial product exports fell 2.9% to $3.20 billion, weighed by rubber (-15.1%), sugar (-29.9%), cassava products (-18.5%) and rice (-1.0%). But some exports of some products steadily increased, such as fresh, frozen and processed fruits and vegetables (+24.7%), fresh, frozen and processed chicken (+8.7%) and beverages (+3.7%).
Exports of industrial products fell 5.9% to $15.01 billion, led by oil-related products (-9.6%), internal combustion engines and parts (-33.9%), computers and parts (-10.1%) and automobiles and parts (-5.1%). Some categories still expanded at a favourable rate, such as watches and parts (+174.7%), radios, TVs and parts (+31.1%) and jewellery and accessories, excluding gold (+3.5%).
According to Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, exports to the US experienced constant growth led by apparel, automobiles and parts, and steel and aluminium. Thailand also accelerated its exports to the US, especially solar cells and washing machines, to avoid out-quota tariff rates.
Exports to Japan, India and the CLMV (Cambodia, Laos, Myanmar, Vietnam) grew favourably, yet with decreasing rates of 0.9%, 3.1% and 0.6% respectively.
Exports to other markets contracted, especially those closely related to Chinese supply chains such as Hong Kong and Taiwan. Furthermore, exports of numerous products to China dropped in response to China's trade slowdown.
Exports to Australia and Asean-5 also saw a contraction, mostly from oil-related products and automobiles.
Ms Pimchanok said the trade war is estimated to cost Thai exports $240.5 million, especially goods in supply chains such as automobile and parts, housewares, electric appliances, and computers and parts.
"Overall Thailand's exports in 2019 will face downside risk factors, including the slowdown in global demand, low commodity prices due to oversupply, the baht's appreciation and ongoing trade disputes," she said. "In the current ministerial trade talk between the US and China in Washington DC, the market expects both to reach an agreement and announce a memorandum of understanding afterwards. Moreover, the possibility that the US may extend its initial tariff deadline will send a positive signal to the market and improve global trade sentiment."
Tim Leelahaphan, an economist at Standard Chartered Bank Thai, said exports will jump in February when the arms are returned, improving the trade balance.