Exports grew 16.6 per cent to $60.55 billion, while imports increased 4.9 per cent to $62.58 billion.

The ministry said a gradual fall in fuel imports, encouraged by stringent controls, will help Thailand record a minimal trade deficit this year.

Fuel imports decreased 11.4 per cent to $2.11 billion last month. Crude oil imports totalled 24.39 million barrels - a fall of 18.6 per cent from the same period last year.

However, earlier this week, the Energy Ministry said renewed oil price rises, sparked by concern about the Middle East conflict and Iran's nuclear programme, could push up fuel imports this year to more than Bt700 billion, a new record.

Crude futures last week jumped above $78 per barrel but eased this week to end at $74.08 in trading in Singapore yesterday.

Fuel imports were the major concern that led the ministry to forecast an annual trade deficit of $6 billion this year.

Karun Kittisataporn, permanent secretary of the ministry, said he was confident the trade deficit would be less than last year's figure of $7.2 billion.

"Thailand may record a trade deficit for the remaining period, but we have no need to worry because the increase in imports will boost exports in return," he said.

Year-on-year import value grew 3 per cent in June to $11.38 billion, while exports jumped 18 per cent to $10.95 billion. This caused a trade deficit of $427.6 million last month.

Karun predicted that exports would exceed $10 billion per month for the rest of the year and that total exports would grow 17.5 per cent to $130 billion. June was the third month this year when exports exceeded $10 billion.

Chatra Purnariksha, director-general of the Export Promotion Department, said there were positive signs that exports would grow gradually for the rest of the year. More than 70 per cent of manufacturers are confident that exports will achieve targets.

Exports of agricultural goods increased 21 per cent in June, well above the target of 10.7 per cent. Industrial exports rose 11 per cent, with electrical goods and automobile parts performing particularly well.

However, sugar, furniture, leather goods and paper are sectors that might not achieve export targets because of a lack of raw materials and labour, but Chatra expects a rise in exports of electronic goods and hard-disc drives.

"Hutchison, America's leading manufacturer of hard-disc drives, is now considering expanding its investment in Thailand," she said, adding that the Kingdom's political problems had not influenced investors' confidence.

She is concerned that a recent joint venture between China and an Italian company to make air-conditioners may hit Thailand's exports of the systems.

Although rice exports dropped 11.5 per cent in June, the Commerce Ministry said its export value would exceed its target following the ministry's strategy to raise the level of rice prices.

Rachane Potjanasuntorn, director-general of the Foreign Trade Department, said the price of rice had increased more than 5 per cent from last year, rising by $17 per tonne for the first half of the year compared with 2005.

Petchanet Pratruangkrai

The Nation