Export growth target of 3.5% 'unlikely to be met'

Economy June 27, 2014 00:00

By Petchanet Pratruangkrai
The N

3,757 Viewed

Exports are likely to miss this year's growth target of 3.5 per cent because of lower market prices of farm products and low volume of many agricultural-industry products.

“Average shipments in the remaining months need to grow by 5 per cent or US$20 billion a month if Thailand wants to achieve the export-growth target of 3.5 per cent this year,” Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department, said yesterday. However, the Commerce Ministry has not yet lowered its export goal for this year as it is optimistic that shipments will return to growth in the remaining months.
Also, the ministry believes that the United States’ downgrade of Thailand in its “Trafficking in Persons” report will not affect the country’s trade with the US and the European Union, as the Thai public and private sectors are endeavouring strenuously to explain the labour situation here, while most importers still have confidence in the Thai seafood industry.
Exports in the first five months edged down 1.2 per cent year on year to $92.86 billion, or up 8.3 per cent to Bt2.99 trillion. Last month alone, exports dropped 2.1 per cent for the third straight month to $19.4 billion, or up 9.8 per cent to Bt621.19 billion.
In the first five months, major products that are facing falling prices, despite high export volume, included rubber, up 9.5 per cent by volume but down 18.8 per cent by value. 
However, sugar was down 20 per cent by volume but up 29 per cent in value and tapioca was down 24.3 per cent by volume and 12 per cent in value.
Exports dropped 2.7 per cent for food products, 12 per cent for seafood and a whopping 23.6 per cent for shrimp. Export of industrial goods rose slightly in the first five months by 1.6 per cent, but fell by 0.1 per cent last month.
Decline in car shipments 
Shipments last month dropped because of declines in automobiles of 11.8 per cent, refrigerators 10.9 per cent and televisions 9.7 per cent. 
The growth target of 3.5 per cent assumes that global gross domestic product expands by 3.6-3.7 per cent, prices of industrial products increase by 1.3 per cent and the baht stays about 31.50 to the US dollar. Last month it averaged 32.02.
The ministry projects shipments picking up next quarter, but they could run into trouble from natural disasters, a shortage of raw materials especially shrimp, lower rubber prices and the expiration of the Generalised System of Preferences in the US last August and in the EU early next year. 
Exports to the EU rose 6.4 per cent in the first five months and to the US 1.1 per cent, but to Japan slid 1.7 per cent.
The economies of the EU and US are recovering, but consumer demand in Japan took a hit from the increase in the value-added-tax rate and weakening of the yen.
Imports dropped year on year by 14 per cent last month to $20.2 billion and by 15.4 per cent in the first five months to $94.41 billion, leaving a trade deficit of $808.8 million last month and a trade deficit of $1.55 billion in the first five months.