Thailand’s exports dropped by 4.47 per cent year-on-year to a total of US$20.64 billion in February – much less than the market’s expectation of at least 10 per cent contraction.
The Ministry of Commerce also said on Monday that exports actually expanded by 1.5 per cent last month if the exports of commodities and arms were excluded.
Imports, on the other hand, contracted by 4.3 per cent year-on-year to $16.74 billion.
Thailand’s exports rose for the first time in six months by 3.35 per cent year-on-year in January to $19.63 billion, mainly driven by shipments of oil and gold. This was the first expansion in six months until the latest contraction in February.
When combining the first two months of 2020 – in January and February – we see exports contracting slightly by 0.81 per cent with a total value of $40.27 billion.
Imports, meanwhile, have already contracted by 6.32 per cent for a total of $37.93 billion in these first two months, leading to a trade surplus of $2.34 billion.
Representatives from the private sector – the Joint Standing Committee on Commerce, Industry, and Banking – expects exports to be flat or contract by as much as 2 percent this year due to the hit from the coronavirus outbreak on the regional supply chain.
Standard Chartered economist Tim Leelahaphan told Thai Enquirer that the total export number in February was distorted by the shipment of arms following the Cobra Gold 2020 military exercise last month.
“Without the exporting arms back to the US, the expansion of 1.5 per cent is still weak where the export of main components such as rice is still contracting year-on-year,” he said.
The export value of rice contracted by 27 per cent year-on-year in February. Its export volume also contracted by more than 40 per cent in the same month. This came on top of the contraction of 26 per cent in value and 34 per cent in volume in January.
On the other hand, the export of processed food and electronics continue to pick up in February as the trade war between the US and China is stabilizing.
However, Tim pointed towards the contraction of 4.3 per cent which is more than the market expected where imports are down in every sector from lower economic and manufacturing activities.
“The huge contraction in imports might be one of the evidence of supply disruption, where going forward, the import of materials for the production of electronic products and components could be disrupted as well,” he said.
“We have to wait and see how the import of electronic would be like come the March numbers,” he added.
The better than expected export numbers, however, did not add positive sentiment of the equity market as the Stock Exchange of Thailand (SET) dropped by 8 per cent on Monday afternoon, triggering another use of the circuit breaker.
The index opened with 1127.24 on Monday morning before dropping down 90.19 points to 1037.05 points as of 15:25pm, when the breaker automatically kicked in.
The index went on to close at 1024.46, down 9.12 per cent from Friday.
The index is trading on poor market sentiment due to the coronavirus outbreak. Regulators have been coming up with measures to shore up the bond and mutual fund markets but turbulence within the equity market continues.