Thailand
Thailand: February exports unimpeded by baht
Exports retained their growth momentum in February, up 10.3% year-on-year, on the heels of a 17.6% increase in January that was the highest in 62 months.
The Commerce Ministry reported yesterday that the country’s customs-cleared exports grew for the 12th straight month in February, fetching Thailand US$20.4 billion (637 billion baht), driven largely by the economic recovery and growing demand from key trading partners.
The export surge was led by cars and auto parts, computers and parts, rubber products, plastic pellets, gems and jewellery, chemicals, finished oil, machinery and parts, and electrical circuits.
Exports rose to all major markets, especially Russia and the Commonwealth of Independent States, to which shipments surged 89% year-on-year last month. Also seeing strong growth were exports to India (up 42.9%), Japan (up 41.1%), South Asia (up 29.4%) and Australia (up 18.2%).
Shipments to the US, the EU, the Middle East and Asean, including Cambodia, Laos, Myanmar and Vietnam, also grew.
Pimchanok: Economies of trade partners are improving.
Exports of agricultural and agro-industrial products rose for the 16th straight month in February, up 0.3% year-on-year at $3.14 billion, led by rice, frozen and canned poultry, tapioca products, and palm oil. Industrial product shipments saw double-digit growth for the seventh straight month, up 11.5% in February to copy6.5 billion, thanks to strong exports of automobiles and parts, computers and components, machinery and components, and finished oil.
But the strong baht put a dent in Thai shipments, as in baht terms the country’s exports contracted for the first time in 12 months.
In February, exports in those terms totalled 644 billion baht, down 0.6% year-on-year.
“Thailand’s exports in February were considered solid, as Thai products are still in high demand in the world market,” said Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office. “Most importantly, the economies of Thailand’s key trading partners have strongly improved.
“We believe that the country’s overall exports will achieve the 8% growth target.” But Ms Pimchanok said that given the baht’s appreciation, all related parties need to step up efforts to tackle the issue, adding that Thai exporters’ income will diminish if the baht is left unharnessed.
The ministry said imports in February grew by 16% year-on-year to copy9.6 billion, leading the country to enjoy an $808-million trade surplus.
For the first two months of the year, shipments amounted to $40.5 billion, up 13.8% from the same period last year, with imports totalling $39.8 billion, up 20.1% year-on- year. The trade surplus for the two-month period totalled $689 million. For the period, exports of agricultural and agro-industrial products rose 8% from the same period last year to $6.43 billion, while industrial product shipments expanded 14.2% to $32.4 billion.
Visit Limluecha, vice-chairman of Thai National Shippers’ Council (TNSC), said it was a good sign that exporters had started importing capital goods to reduce production costs, reiterating that the better economic fortunes of key markets had also boosted Thai shipments.
But exporters have urged the government to monitor small and medium-sized enterprises, especially those producing agricultural goods that have been hit hard by the stronger baht.
Siam Commercial Bank’s Economic Intelligence Unit (EIC) expects full-year exports to expand by 5% on the back of an improving global manufacturing industry and a pickup in both oil and crop prices. The baht’s appreciation, however, has affected Thai exporters’ competitiveness compared with the country’s trading partners, while the export of farm products could be adversely affected in terms of lower profits, the EIC said.
The baht has appreciated by 5% year-to-date in terms of the real effective exchange rate since the beginning of 2017, according to the EIC.
Thailand’s merchandise exports also face risks from the US’s protectionist trade policies and possible retaliatory measures from several countries, the think-tank said.
The EIC assessed that a tariff imposed on steel imports into the US, approved by President Donald Trump, would lower Thai steel exports to the US by 200,000 tonnes.
That would account for 9% of total domestic steel exports, but a mere 0.1% of total Thai exports.
Source: https://www.bangkokpost.com/business/news/1432790/february-exports-unimpeded-by-baht