Thailand’s exports fell for the fifth straight months from August to December while total exports declined by 2.65 per cent in 2019, according to data from the Ministry of Commerce.
The Kasikorn Research Center now expects the country’s export value to contract by 1 per cent this year from the slowdown in global demand and a strong Thai baht.
The total export value of Thailand was worth US$246 billion in 2019, representing a decrease of 2.65 per cent from 2018. Import also declined by 4.7 per cent to $237 billion, creating a trade surplus of $9.6 billion.
The Trade Policy and Strategy Office, an economic planning unit of the Ministry of Commerce, said the contraction of export value in December was due mainly to an uncertain global trade situation, the decreasing of exports in major industrial products, and relatively low prices for agricultural products.
The exports of rice (minus 41.14 per cent), potatoes (minus 24.03 per cent), vehicles and its components (minus 14.58 per cent), chemicals (minus 22.37 per cent) and plastic beads (8.91 per cent) have all contracted in December when compared to the same period in 2018.
Interestingly, Thai exports to China and the US have expanded by 7.3 per cent and 15.6 per cent year-on-year in December. The research center said these were due to temporary factors, however.
For example, the export from Thailand to the US grew partially because of the baseline for the export of computer, equipment and components was low in the previous year. The global demand of the electronics has been slowing down as the world is moving towards 5G technology but demand picked up last month in Thailand.
For Chinese market, the increase came from products that were exported to China in preparation for Chinese New Year this month. There was a growth in export for fresh fruits, frozen fruits and dried fruits at 110 per cent year-on-year.
Kasikorn Research Centre predicted that total export will continue to contract in 2020 by 1.0 per cent with an estimated range from minus 2.0 per cent to 1.0 per cent growth this year. This is due to the slowdown in global economy and strong baht compared with trading partners. The projection is in line with the Thai National Shippers’ Council (TNSC)’s estimation of a flat to 1 per cent growth this year. However, the Commerce Ministry still believes that an export growth of 1.5-2 per cent is still possible this year.
The average rate of the baht from the beginning of the year until January was at 30.28 baht per US dollar, comparing to an average of 31.05 baht for the entirety of last year.