Food exporter shares rise as baht weakens to 5-year low 

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Shares in Thailand-based food manufacturers gained on Wednesday as the baht fell to 35 baht per US dollar, the lowest in more than five years, amid pressures from the Federal Reserve’s planned rate hikes.

The gain was led by Thai sauce maker Exotic Food Plc (XO) rising 5.62 per cent to 16.90 baht as of the morning session. 

Chicken exporter Thaifoods Group Plc (TFG) climbed 5.45 per cent to 5.80 baht, while seafood manufacturer Thai Union Group Plc (TU) advanced 2.3 per cent to 17.80 baht. 

Despite a drop in the overall market, investors were upbeat about the food exporters’ outlook, since the weakened baht will allow them to record higher gains from their foreign exchange calculations. 

“Stocks in the export and food sector will see strong demand,” analysts at KTB Securities said, adding that the global food shortage caused by the Russia-Ukraine war could last at least another year. 

“The weakening of the baht and the global food crisis will boost sentiment for those exporters,” KTB noted.

Analysts anticipate that the Fed will hike its interest rate by 0.75 percent in June and July, causing the baht to swing heavily ahead of the monetary meetings.

Poon Panichpibool, a market strategist at Krungthai Bank, predicted that the baht might weaken further to 35.20 per US dollar on Wednesday, but not likely exceed the resistance level of 35.50 baht per US dollar.

“To limit risks from exchange rates, operators should consider hedging tools such as options while the market is highly volatile,” he suggested.

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