InfoQuest (March 26, 2020) -- As the COVID-19 outbreak in China has been gradually contained, Thailand's exports are likely to increase by the end of the second quarter. The main exports expected to register an increase include agricultural produce and food products such as rice, vegetables, fruits, tapioca, rubber, fresh, frozen and processed chicken, frozen and processed seafood, beverages and seasonings, according to Ms. Pimchanok Wonpornporn, director of the Trade Policy and Strategy Office (TPSO). Chinese consumers still have enormous purchasing power, and their demand is expected to grow because of domestic economic recovery, in addition to the cancellation of Chinese New Year celebrations in January.
The situation is worsening in Europe, particularly in Italy, Spain and the UK, but in the short term, imports and shipments will not be disrupted, and demand for food and medical products in Europe is expected to see a spike in the coming months. During the period when Thais are asked to stay at home for isolation, food enterprises are recommended to produce high-valued processed or instant products that can easily enter the markets of Thailand's trading partners, and take full advantage of the reputation, credibility in safety and international certification standards of Thai food.
Ms. Pimchanok said that despite the current epidemic, Thailand still saw a better performing export sector in 2020 than many countries, and its exports were gaining market share in several markets, including the United States, Japan and South Korea. She believed that Thai exports have an opportunity to continue to grow in markets with high global demand. In agricultural products and food, in particular, Thailand could turn the crisis into an opportunity to grab more global market share. In addition, exports of some industrial products are recovering as the trade war eases, as is evident from the growing export of electronics.
The TPSO analyzed the export trends of the products enjoying sustainable growth and predicted higher demand in the next phase. Hence, it recommended exporters to prepare for the demand spike. Agricultural products with good growth momentum included rubber and rubber products, with exports growing for two and six consecutive months respectively, especially in the markets of China, the United States, Turkey and South Korea. This is partly because of the Memorandum of Understanding (MOU) signed by Deputy Prime Minister and Commerce Minister Jurin Laksawis, which expedited the export of relevant products.
Demand for other products is also expected to grow during the home isolation period. For example, pet feed, which has seen demand growing for six months in a row, with major markets including the United States, Japan and Malaysia. Demand for seasonings has been growing for three consecutive months, particularly from the United States, Japan and Australia. Demand for frozen and processed chicken, has been growing for eight months in a row, mainly from the markets of Japan, the UK and China. In particular, bird flu and African swine fever has broken out in China earlier, which has led to sharp declines in production, hence import demand spike. According to the Food and Agriculture Organization (FAO) of the United Nations. food hoarding caused by countries' measures to shut down cities could lead to global food inflation. As a result, food demand is expected to increase sharply around the world. This will present a golden opportunity for Thailand to introduce its products to consumers in many overseas markets.
Industrial products with good export prospects include internal combustion engines, Tier 2 and Tier 3 auto parts as Thailand boasts production potential in these fields. They are expected to enjoy sound growth in the context of low oil prices. Exports of rubber gloves have soared by more than 180 percent in the past three months due to the virus outbreak. Motorcycles and parts have continued to grow since February last year. Furniture and accessories have been growing for 10 consecutive months, mainly exported to the United States. Computers and components have been growing for three months. Switchboards and electrical control panels have been increasing continuously for six months. The exports of air conditioner parts and products have been popular in overseas markets. Electronics exports rose, reflecting that the impact of the trade war has abated and Thailand's industrial exports have gradually recovered.
Source: InfoQuest, by Phana / Tanawat / Rachada, translated by Xinhua Silk Road.
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