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EXPORT FORECAST

Shippers' council sticks to 5% growth for this year

THE THAI National Shippers' Council (TNSC) yesterday said the current political uncertainty had not affected exports or the shipping industry, and that it was maintaining its prediction of 5-per-cent export growth for this year.

A global economic recovery - especially in the United States, the European Union and Japan - continues to be counted on as the main driver of Thai export growth in 2014, while the increase in global oil prices has not had a negative effect on overall freight costs, said the TNSC.

"Order numbers in the first quarter of 2014 are still looking good, while the global economy continues to recover. That is why the TNSC board has decided to maintain its prediction of 5-per-cent export growth for this year, based on the prediction of global economic growth of 3.5-3.7 per cent, and as long as the baht remains [around] 34 per US dollar," said Nopporn Thepsitthar, chairman of the council.

He said that while the value of Thai exports last year had contracted by 0.31 per cent, he expected this year to be much better on increased demand from abroad and signs of recovery in the export sector at the end of last year. Export value hit US$18 billion (Bt590 billion) in December.

Ratidanai Hoonsawat, head of the council's export-performance-index project, confirmed that global economic recovery would be the main driving force for export growth this year.

He believes negative external factors such as the US Federal Reserve's tapering of its quantitative-easing (QE) programme and China's potential liquidity problems will not affect Thailand's export sector in 2014.

"Even though it has been lowered, the US's QE policy will continue to exist this year, while the value of the baht has dropped because of it. But the markets have expected this for a long time, so they are prepared for it," he said.

Vallop Vitanakorn, vice chairman of the TNSC, said the transport of products and the transaction of orders had generally continued to operate normally during the anti-government protests, and that the situation had not affected its processes.

Moreover, overseas buyers are still confident in Thailand's export credibility, and in the country's resilience and ability to bounce back in times of crisis, he said.

Vallop explained that the increasing global oil price only had an effect on the production costs of certain industries, such as ceramics, petrochemicals and metalworking, which required the use of high energy levels. Most other sectors remain largely unaffected, which is why the freight cost for shipping remains the same.

"The protests in the capital do not have effects on logistics, other than the worsening traffic jams. The absence of a permanent government and the closing down of government buildings also have no effect on the issuing and receiving of [purchase] orders, since the authorities in permanent positions are still working as normal," said the vice chairman.

However, despite the minimal effect of the protests on logistics, Vallop said the state of emergency had increased the price of security for shipping, which in turn increased costs.

In addition, the reduction in the number of commercial flights by some airlines has lessened export space, since most of them carry cargo as well as passengers.

He urged the government to reconsider the length of the state of emergency before it caused any more damage to the country's economy.

Nopporn said the biggest concern connected with the possible absence of a permanent government in the next six months would be delayed progress in negotiations for a free-trade agreement with the EU. The lifting of Generalised System of Preferences status for the Kingdom was another concern that must be addressed by the new government.

"If the political situation is prolonged, the country's competitiveness in terms of product prices will be affected, since we cannot make any new FTA deals while there is an absence of a permanent government," he warned.


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