Thailand: Exports value dips for sixth month in a row

Though Thai exports fell for a sixth consecutive month in March and the global economy remains sluggish, the Commerce Ministry remains confident shipments can meet the growth target of 1-2% this year.

According to Deputy Commerce Minister Sinit Lertkrai, the export trend for the second quarter began negatively, but the contraction rate is decreasing and should turn positive from the second half of the year.

“The ministry has made evaluations and we expect to achieve this year’s target of 1-2% growth. To do so, our exports must reach US$24.5 billion each month,” Mr Sinit said.

The ministry reported on Wednesday the customs-cleared value of exports dipped for a sixth consecutive month in March, falling by 4.2% year-on-year to $27.7 billion, while imports decreased by 7.1% to $24.9 billion, resulting in a trade surplus of $2.71 billion.

In the first quarter, the country’s exports decreased by 4.5% to $70.3 billion, while imports decreased by 0.5% to $73.3 billion, resulting in a trade deficit of $3.04 billion.

Exports from the real sector, which excludes gold, oil-related products and weaponry, edged up by 0.01% from March last year.

Despite the contraction in exports, the value of Thai shipments surpassed the five-year average of $23.9 billion and reached the highest point in 12 months thanks to positive signals in major markets such as the US, Japan, South Korea and India.

The growth was mainly driven by strong demand for agricultural and agro-industrial products, as well as several key industrial goods.

Thailand’s international trade balance returned to a surplus for the first time in a year in March, said Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office.

Thai exports of agricultural and agro-industrial products expanded for a second straight month in March at a rate of 4.2% year-on-year to $4.5 billion, following 3.6% growth in February.

Products that expanded sharply included fresh, chilled, frozen and dried fruit (94.5%), sugar (73.9%), fresh, chilled and frozen chicken (47.9%), drinks (13.2%), rice (7.2%), animal and vegetable fats and oils (6.2%), and cassava products (5.7%).

Industrial product exports in March contracted for a sixth consecutive month by 5.9% year-on-year to $22.2 billion.

Product shipments that expanded for the period include semiconductors, transistors and diodes (66.4%), electrical transformers and parts (55.9%), fax machines, telephones, equipment and parts (27.4%), air conditioners and components (16.7%), motorcycles and components (5.0%), and automobiles, equipment and parts (1.4%).

For the first three months, shipments of agricultural and agro-industrial products edged up by 1.9% to copy1.8 billion, while industrial product exports contracted 5.8% to $55.9 billion.

Mr Poonpong said the office’s evaluation of the export outlook found the global economy is still sluggish because of various factors, including the high rate of inflation and interest rates in different regions of the world. The banking crisis in the West also undermined consumer and business confidence, while political conflicts have caused fluctuations in energy prices.

In the first quarter of 2023, the ministry’s efforts to restore relationships and open up new markets in central and eastern Europe, as well as reach regional trade agreements with potential markets in China, South Korea and India, helped Thailand to increase its income from exports, he said. These efforts should support Thai exports despite a weak global economy, said Mr Poonpong.

Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council, said the country’s exports in March fared better than the double-digit contraction projected earlier by the council. The private sector expects exports to return to positive territory this year, with improvements expected to start in the second quarter, especially for the industrial sector.

He said the baht is projected to be in a range of 33-35 per US dollar, which would be a crucial for exports over the remainder of this year.