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Published on December 26, 2007

 This is expected to put pressure on Thai garment exporters and the industry predicts its export value will be affected next year.

"Although some demand will remain for Thai garments, many American consumers will turn to cheaper goods at discount stores rather than department stores", said Vallop Vitnankorn, secretary-general of the Thai Garment Manufacturers Association.

He said garment exports to the US in terms of volume would remain unchanged but the value will decrease next year. As a result, exporters should concentrate on consumer demand to ensure they retain their market in the U.S.

"Despite low purchasing power, American consumers have still focused on quality goods and reasonable prices," he said.

A recent report issued by the association said the industry had experienced a margin loss of 20 per cent since the start of the year due to the fluctuating baht. The currency has appreciated from 42 from early this year to 33.70 against the US dollar yesterday.

To avoid losses, the association has warned exporters not to take lots of large-quantity orders and urged them to consider their production capacity and cost as a priority.

However, Thai garment exports to the US should not drop next year as it is expected that Chinese garments will face more restrictions in the market. As a result, China will turn its focus to its domestic market, which is growing rapidly.

China would not mind if the income gap between the garment export value and its domestic sales value is only 3-5 per cent.

The 2008 Olympics being held in Beijing will also increase domestic garment demand significantly, Vallop said.

The Department of Export Promotion reported that overall exports to the US had dropped 8.43 per cent to US$1.36 billion (Bt45.83 billion) in the first 11 months of the year. It expects exports to the US will increase 10 per cent to $7.74 billion next year.

Petchanet Pratruangkrai

 The Nation