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Thailand: Strong baht bites into canned tuna export
Thai exports for canned tuna are expected to miss their target of 80 billion baht as the stronger baht bites into the country’s competitive edge, says Chanintr Chalisarapong, president of the Thai Tuna Industry Association.
Mr Chanintr said the strengthening of baht against the dollar had raised the prices of Thai products, making similar products from other countries more attractive alternatives for customers.
“The baht continues to rise further and it is adversely affecting our exports,” said Mr Chanintr.
He urged action from the government and the Bank of Thailand to stabilise the local currency to support exports, which account for more than 60% of the country’s GDP.
Mr Chanintr’s comment echoed concerns expressed by exporters from other sectors and the Federation of Thai Industries, which also expect exports to decline in the second half of this year because of the strengthening local currency.
However, the total Thai exports in May bucked expectations with the export value jumping 13.2% year-on-year to UScopy9.9 billion (676 billion baht), the highest in more than four years with the global economic recovery boosting demand.
For tuna exports, Mr Chanintr said the business remained weak although the government had taken some financial initiatives to help absorb the affects of the stronger baht.
“The baht rose from 35.50 baht per dollar to as high as 33.50 baht recently. It is too high,” he said.
Apart from the baht appreciation, rising production costs also weighed heavily on the tuna business to prevent its exports from reaching the target of 80 billion baht this year, said Mr Chanintr.
Weak global oil price was also another negative factor as it had cut the income of the Middle East countries, curtailing their purchasing power.
The Middle East is the biggest export market for Thai canned tuna, accounting for around 40%. It is followed by the US at 20%, Australia 10%, while the EU, Japan and Canada’s combined share stands at around 30%.
To survive in the long term, Mr Chanintr said the Thai canned tuna producers are trying to switch to higher value products in order to up their higher profit margins.
The tuna exporters are also diversifying into other emerging markets to help offset falls in exports to the Middle East. The new markets with strong buying potentials are South Africa, Latin America and Asian countries, he said.
Mr Chanintr added that he has been working closely with the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) to seek ways to support the tuna exporters and those from other sectors.
The JSCCIB has sought help from the government, calling for further measures to support exporters during the time when the baht is high.
The JSCCIB forecasts Thai export growth of 3-3.5% this year, lower than the optimistic prediction of 5% by the Commerce Ministry.
Source: http://www.bangkokpost.com/business/news/1281415/strong-baht-bites-into-canned-tuna-export