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Thailand: Shippers expect year-end orders to beef up exports

More goods purchase orders from abroad during year-end festivals are expected to help increase export value by 15-16% to US$266-268 million this year, says the Federation of Thai Industries (FTI).

Trade partners tend to buy more products as Christmas and New Year celebrations are approaching, a prospect that is good for the export sector, said Kriengkrai Thiennukul, vice-chairman of the FTI.

“The last two months of the year is shopping season. This boosts demand for products. People especially prefer buying gifts from overseas,” he said.

The FTI expects new purchase orders will also help increase Thailand’s capacity utilisation.

The capacity utilisation rate was recorded at 61.98% in September, according to the Office of Industrial Economics.

From January to October, Thailand’s export value increased by 15% to $222.73 million.

The export sector may expand by 12-14% in 2021 due mainly to the global economic recovery, Sanan Angubolkul, chairman of the Thai Chamber of Commerce, a key member of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), said after the panel’s meeting earlier this month.

The JSCCIB revised up its GDP growth forecast to 0.5-1.5% this year, from 0-1%, as it expects better business prospects stemming from the reopening of the country and stimulus measures.

Despite the good export prospects, high freight rates and a container shortage are still problems that affect exporters, according to the FTI.

The federation is concerned about logistics costs as freight rates continue to increase.

“The freight rate for a 40-foot container increased to $15,000 from $5,000,” Mr Kriengkrai said.

Freight rates remain high because global demand for shipping is high while shipping capacity is limited.

Exporters are worried higher transportation costs will cause a delay in purchases and deliveries.

Meanwhile, the FTI is also keeping a close watch on the impact of the global oil price surge on goods transport operators who have demanded the government give more subsidies to cap diesel prices at 25 baht a litre.

Source: https://www.bangkokpost.com/business/2220471/shippers-expect-year-end-orders-to-beef-up-exports