Exporters want baht capped to spur shipments

Economy August 31, 2016 01:00



THE THAI National Shippers Council has called for the Bank of Thailand to cap the baht at Bt34.50 against the US dollar to help the export sector after seeing shipments shrink for four straight years.

“Exports are expected to contract by 2 per cent this year. Shipments in the second half will also not grow or will go down by 2 per cent as the baht has strengthened, causing difficulty in competing,” chairman Nopporn Thepsithar said yesterday.

Exports will definitely continue to lose momentum this year because of weakening price competitiveness from the baht’s appreciation, the global economic slowdown and the spread of Middle East respiratory syndrome (MERS) and the Zika virus, he said.

The baht has gained 4.41 per cent from early this year, which poses problems for Thai exports compared with its rivals.

In particular, the Vietnamese dong has been depreciating.

MERS and Zika have increased costs for Thai shippers. China has imposed stringent control measures for imported goods. Thai shippers now need to pay an extra Bt4,000 per container for spraying disinfectant after the World Health Organisation listed Thailand as a risk country for MERS and Zika.

Vallop Vitanakorn, vice chairman of the shippers’ council, said exports were expected to pick up slightly during the remainder of the year, but still the baht’s uptrend had made it difficult for exporters to compete.

“If Thailand could stabilise the baht and make sure it does not get stronger than Bt34.50 per US dollar, exports should grow more strongly. If the baht has too much strength, Thai traders will need to increase product prices, and that would make exporting tougher,” he said.