Thai exports up 7% in August, hitting US$26.2 billion

Thai exports saw a significant rise in August, expanding by 7% to reach US$26.2 billion (940 billion baht), fuelled by a surge in demand for agricultural and food products.

This growth was attributed to the increased purchasing power of trading partners, alongside support from global climate fluctuations and the recovery of the service sector in key markets, said Poonpong Naiyanapakorn, director-general of the Trade Policy and Strategy Office.

Shipments in the real sector, excluding gold, oil-related products, and weaponry, witnessed a 4.3% increase during the same period, said Poonpong.

“The EU’s economy is starting to recover from inflationary pressures, leading to an increase in consumer purchasing power and a revival in demand for Thai products.”

Additionally, a reduction in shipping costs, especially for routes to the US and Europe, lowered exporters’ expenses and enhanced their price competitiveness.

Imports in August also rose by 8.9% to US$25.9 billion, resulting in a trade surplus of US$265 million. Over the first eight months of 2024, exports grew by 4.2% to US$197 billion, while imports expanded by 5% to US$204 billion, leading to a trade deficit of US$6.3 billion.

The agricultural and agro-industrial sector saw a notable 17.4% year-on-year increase in exports to US$4.73 billion in August, marking the second consecutive month of growth.

Thai export

Key products driving this expansion included fresh, chilled, frozen, and dried fruit; rice; rubber; canned and processed seafood; pet food; and animal and vegetable fats and oils. However, there were declines in shipments of tapioca products, sugar, fresh, chilled and frozen chicken, and canned and processed vegetables.

Industrial product exports also grew, rising by 5.2% year-on-year to US$20.4 billion, continuing a five-month streak of growth. Expanding shipments were recorded for automobiles, equipment and auto parts; computers, equipment and parts; rubber products; machinery and mechanical components; chemicals; telephones, equipment and parts; and air conditioners and parts.

On the other hand, shipments of certain industrial products like internal combustion engines and parts, circuit boards, and semiconductors, transistors, and diodes saw declines.

Poonpong is optimistic about the overall outlook for the year, predicting a 1 to 2% rise in exports to US$290 billion (10 trillion baht). He indicated that shipments could surpass the upper limit of 2% if the demand for Thai agricultural products increases, particularly as more trade partners focus on food security due to global climate fluctuations affecting production in various countries.

“However, there are risks that could pressure exports, such as high geopolitical uncertainty, continued appreciation of the baht, and potential domestic floods affecting agricultural production.”

Chaichan Charoensuk, chairman of the Thai National Shippers’ Council, expressed concerns about the rapid appreciation of the baht, which could impact export negotiations for deliveries scheduled in November and December.

“The baht’s appreciation is expected to continue until the first quarter of 2025.”

Despite this, most domestic firms involved in international trade have hedged against foreign exchange risk due to the baht’s strength. However, exporters who pre-sold products, particularly agricultural goods, between July and August might face liquidity issues as they receive less money in baht, reported Bangkok Post.

Addressing the government’s planned daily minimum wage hike to 400 baht (US$12), Chaichan emphasised that exporters are seeking a postponement.

“An increase in production costs will affect the agricultural and service sectors, such as logistics, wholesale and retail, as well as small businesses suffering from the baht’s appreciation.”