InfoQuest (March 21) -- The Trade Policy and Strategy Office of the Ministry of Commerce released data of Thailand's international trade. The data show that in February 2019, Thailand of Thailand registered a total export volume of 21.5537 billion U.S. dollars, shifting from a negative growth of 5.65 percent in January to an increase rate of 5.91 percent; its import volume reached 17.5192 billion U.S. dollars, a year-on-year decrease of 10.03 percent, securing a foreign trade surplus worth 4.0344 billion U.S. dollars.
Judging from the overall picture of the first two months of 2019, the total export stood at 40.5476 billion U.S. dollars, up 0.16 percent; the total import volume was 40.5455 billion U.S. dollars, up 2.20 percent, registering a foreign trade surplus worth 2 million U.S. dollars
Ms. Pimchanok Vonkorpon, director of the Trade Policy and Strategy Office, revealed that for the first time, the total export volume of February 2019 surpassed the 21.553 billion U.S. dollars of the previous four months, up 5.9 percent. While excluding trade volume related to oil, gold, and weaponry, the total export volume would decrease by 4.9 percent.
Thailand's exports of major products still show a trend of slowdown. Factors include the pressure of world trade environment, the demand decrease of trading partner countries, the extension of China-US trade tension, and internal factors of some countries, especially new countries. Besides, the price cut of oil led to export decrease compared with last year, and the trend of currency appreciation lowered the purchasing power.
Exports of industrial goods registered a year-on-year growth of 7.5 percent, and a decrease of 3.9 percent if weaponry exports are excluded. Noticeably, the exports of electronic products decreased by 9.5 percent. With price as a major factor, exports of oil-related products have decreased for two consecutive years, and auto exports were sluggish in multiple markets. Reasons behind: more and more countries are showing concerns to environmental protection, a growing number of consumers are showing interest in electric cars, and the slowdown of world economy and the decline of product price have dent the consumption power of trading partner countries.
Meanwhile, the total export of agricultural and sideline products declined by 0.9 percent. Affected by the trend of world trade, the demand for rice, cassava and rubber in world market decreased, resulting to high stocks of trading nations. The appreciation of baht drove demand slowdown in short term. However, the consumption of food, frozen and fresh fruits and vegetables, canned goods, and processed food witnessed sustained increase, especially the demand for chicken, for which the internal supply in China was inadequate, so the country needs to open its market to Thailand.
Ms. Pimchanok Vonkorpon pointed out, "Due to excess supply, now China reduces its imports of rice from Thailand. That is why we did not receive order from China recently. But we still have orders from Middle East and Africa, so Thailand's rice exports in February-Marcha re stable." The rice price in domestic market keeps rising. And what concerns U.S .more is Thai baht is stronger against U.S .dollar, which causes our price quote of rice higher than those of our competitors. Besides, more and more products from neighboring countries which are not GSP-eligible any more begin to compete with our products.
In February, products exported to important markets saw a decline against the backdrop of a global economic slowdown, especially in the countries and regions which are in China's production chain, such as Hong Kong, Korea and Taiwan. Due to tariffs imposed by China and the US, global trade environment remains unstable, which weighs on global exports as well as exports in Thailand.
On the whole, products exported to the U.S .keep climbing, which is partly due to the temporary increase in weaponry, making trade volume reach 97.3 percent. The exports, except weaponry, still increased by 5 percent, especially clothing, electrical appliances, cars, and spare parts which are imposed additional tariffs by America to China.
Ms. Pimchanok Vonkorpon pointed out that as for the trade war export environment will be improved for both Thailand and other countries if China and the U.S .can reach a fair agreement in April. The settlement of trade disputes between the two countries will be positive for global trade.
She also noted that although overall exports in Thailand saw a decline, we still have reasons to believe export will rebound, which is a good signal. Thailand is ready to adjust trade structure. We will expand export countries to minimize the loss caused by limits set by some markets and boost the export potential of export in the future.
We cannot overlook the problem of a strong baht. However, we believe Bank of Thailand will implement policies to address it. At the same time, except external factors beyond control, Thai exporters need attach great importance to exchange rate risk, domestic political change and election to be held.
Ms. Pimchanok Vonkorpon said we will encounter enormous U.S .challenges in export in 2019, due to political change and external influence, especially trade frictions, downturns in important trading partners, price decline of agricultural products, excess product supply. The Ministry of Commerce will pay close attention to economy growth and pursue potential markets to ease the pressure.
The Ministry of Commerce has forecast export growth of 8 percent for this year. As other departments and institutions set the target lower than 5 percent. Next week, Deputy Minister Ms. Chutima Bunyapraphasara will discuss with Deputy Prime Minister Somkid Jatusripitak again and assess factors influencing trade.
The Minister of Commerce expects the next government will attach great importance to trade talks with other countries, for it will weigh on competitiveness of Thai products. Currently, the country is still facing the challenges posed by stronger baht and trade competitors.
"A newly-elected government will come into power soon. I hope the next government will accelerate negotiation procedures. Many countries now are ready to carry trade talks with Thailand when the next government comes into power," Ms.Pimchanok Vonkorpon said.
Source: InfoQuest, by Tanawat Suayaem / Tanawat Suayaem / Sasithorn, translated by Xinhua Silk Road
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