Thai exports set for surge amid favourable market conditions and expansion plans
With predictions of a rebounding global economy, Thai exports are expected to witness a surge in the second half of the year, according to the nation’s Commerce Ministry.
Keerati Rushchano, the permanent commerce secretary, revealed that the current competitive baht exchange rate coupled with planned market expansion initiatives could significantly boost trade. The regions targeted for market expansion include Yunnan province and Nanning City in China, with a particular inclination towards food and fruit exports.
In view of identifying potential new markets, Rushchano indicated that the ministry’s focus is shifting towards the Commonwealth of Independent States and neighbouring nations. A pause in interest rate increases by the US Federal Reserve is considered a positive market shift that could ease pressure on consumer spending and investment, boosting Thai exports. The possibility of a drought in several countries positions Thailand favourably to capitalise on their robust agricultural exports.
Despite his positive outlook, Rushchano acknowledged various risk factors that could potentially impact the Thai export sector negatively. These risks include economic downturns in trading partner countries, especially those in the EU, unpredictable weather conditions affecting agricultural output, and fluctuations in interest and exchange rates.
Further concerns included the trading policies of major trading partners like China and its self-reliance policy. This could introduce a degree of uncertainty and provide challenges to Thai exports. Data from the ministry showed a continuing dip in exports for eight consecutive months as of May. The customs-cleared value of Thai exports decreased by 4.6% to US$24.3 billion, while imports shrank by 3.4%, resulting in a trade deficit, reported Bangkok Post.
In specifics, Thai exports of agricultural and agro-industrial products took a 16.3% year on year plunge in May, amounting to just US$4.44 billion. Interestingly though, industrial product exports saw a 1.5% increase and are valued at US$19.0 billion.
According to Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council, if Thailand can maintain US$24.4 billion in exports per month for the remainder of the year, it will fulfil its annual target of 0%. He also added that the current weakening of the baht against the US dollar together with a union of efforts between the private sector and the government could potentially lead to a projected Thai export growth rate of 1 to 2% by the year end.
