Thailand's export growth this year will definitely reach 12.5 per cent as expected despite the strong baht, says Commerce Minister Krirk-krai Jirapaet.

After meeting with exporters yesterday, Krirk-krai said they were of the opinion that the growth rate was achievable.

"They are certain that the growth rate of 12.5 per cent is possible, due mainly to several positive factors - lower interest rates and lower global oil prices. Though the baht is still strong [against the US dollar], it is finding an equilibrium," he said.

"They are concerned about the violence on New Year's Eve, saying that if this persists, fewer foreigners would attend international fairs, fewer tourists would come and trade value could fall. This is unwanted by all and they condemn the acts of violence."

Exporters believe that export value in 2006 will reach US$130 billion (Bt4.6 trillion), an increase of 17 per cent from 2005.

Exporters at the meeting asked the government to help penetrate new markets. The Commerce Ministry should be the spearhead in setting up distribution centres, negotiating for the generalised system of preferences, assisting those who are affected by the baht's appreciation and solving labour shortages in many industries, particularly food processing.

They also urged the government to bring down import tariffs on some raw materials, particularly wood and gems, and to help exporters deal with anti-dumping tariffs.

 "We will look into all these problems, but we may not be able to help on the baht issue. We can't weaken the baht to increase competitiveness, as Thailand's strong economic fundamentals would propel the baht further," Krirk-krai said.

"This is the phenomenon experienced in many countries - Japan, Korea and Taiwan. All these countries solve the problem by diverting their investment overseas. Now that we are experiencing the problem, we need to increase the budget on research and development, introduce new technology and invest overseas. Such action will increase competitiveness."

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said exports last year should yield Bt94 billion from the export of 7.4 million tonnes of rice - slightly below the target of 7.5 million tonnes or Bt95 billion.

In 2007, the association aims to export 8.5 million tonnes with a value of Bt100 billion.

"What worries us is that although Vietnam announced that it would not export rice, it won the bid to supply 250,000 tonnes of rice to Indonesia and is tipped to win the Philippines bid for the supply of another 500,000 tonnes. The government could help by forging more government-to-government deals for the rice trade," he said.