Too late to rescue this year's exports

Economy September 04, 2012 00:00


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The government should look beyond this year's export figure, which it is too late to shore up, and urgently implement measures to promote exports next year amid expectations of a worsening global economic climate.

After a meeting between exporters from seven key industries and the Commerce Ministry’s International Trade Promotion Department, questions were raised over measures to drive exports this year, as orders are already completed. They called for the government to look forward to next year.

Exporters have reduced their shipment targets for this year because of severe impacts from the euro crunch and rising costs of production amid a lack of stringent government measures to drive exports.

Exporters yesterday shared similar views that this year shipment would be declined largely by 30 per cent falling to about 30-35 per cent growth this year, resulting total Thai shipment to definitely miss the export’s target of 15 per cent this year. ???

Sukij Kongpiyacharn, president of the Thai Garment Manufacturers Association, said it was no longer worthwhile worrying about this year’s export value. It is more important that the government think about how to drive export next year amid an expected economic meltdown.

“Shipment orders for this year are already done, as only four months are left. It is not the time to discuss export figures for this year, but they must focus on seeking plans for driving exports and eliminating shipment barriers,” Sukij said.

The association projects that garment exports will drop by 10 per cent this year from US$3.27 billion (Bt102 billion) in 2011. This projection is gloomier than the Commerce Ministry’s target of flat growth.

Paiboon Ponsuwanna, president of the Thai National Shippers Council, said exporters were facing higher production costs, mainly for labour, while they could not increase prices because of lower purchasing power and high competition in the global market.

“Many multinational companies are laying off their employees this year because of the global impact of the euro economic crunch. This will affect world trade, including Thai export, next year as millions of people will be unemployed. The government should concentrate its plans to drive exports next year, as shipments will face many obstacles,” Paiboon said.

Although Prime Minister Yingluck Shinawatra called a meeting with exporters and relevant government agencies, they came up with no concrete solutions for the rest of this year or next year, he added.

Paiboon said that besides the Commerce Ministry, other government agencies should cooperate on eliminating tariff and non-tariff barriers to help exporters. He added that whatever growth exports saw this year was not due to higher demand, but producers had to cut prices to reduce the cost of stockpiling.

Vallop Vitanakorn, vice chairman of the Federation of Thai Industries, said the government should set up “hard sell” activities to penetrate new export markets, mainly in Asean.

Deputy Commerce Minister Poom Sarapol said the ministry was not yet ready to lower the official export-growth target for this year, though it now was undeniable that the 15-per-cent target would be missed. The ministry next week will adjust its official export target for this year after meeting with trade counsellors overseas. It has not yet set a target for next year. Can cut next three grafs for space

According to the Trade Promotion Department’s estimates, if export growth is to hit 9 per cent this year, average export value for the last five months should be $22.16 billion. If the growth target is 7 per cent, average monthly shipments should be at $21.27 billion. In the worst-case scenario, average shipments should be $20.38 billion to drive export growth to 5 per cent.

It estimates that export of food and agricultural sector will drop by 26 per cent this year to $13.56 billion, down from previous projection of a 1-per-cent drop. Frozen-food export will grow by 10 per cent to $3.55 billion, chicken export will rise by 10 per cent to $1.97 billion, and frozen and dried fruits and vegetables will grow by 18 per cent to $1.42 billion.

Export of frozen and processed shrimp is expected to drop by 8 per cent to $3.25 billion, canned and processed fruits and vegetables will decline by 5 per cent to $1.97 billion, and rice export would drop by 31 per cent to only $4.4 billion this year.


Ghanyapad Tantipipatpong, president of the Thai Food Processors Association, said exporters had faced serious increases in the cost of production, while major export markets, mainly the European Union, had lower purchasing power.

“Thai food exporters are facing tougher situation as the cost of production has been rising significantly compared with other countries, while the price of raw materials also increased. The government should help reduce import barriers to ensure a supply of raw materials to support export growth,” she said. Can end here

Lifestyle-sector shipments are expected to grow by 2-5 per cent this year to $3.01 billion, from a previous projection of a 3-per-cent drop.

Somchai Pornchindarak, president to the Thai Gem and Jewellery Traders Association, said export of jewellery and ornaments was expected to face flat growth this year at $12.3 billion. Thailand has lost privileges under the Generalised System of Preferences for export of silver ornaments to the US, while at the same time being affected by the euro crisis.

Export of heavy industries including electronics and electrical appliances, automobiles and parts, construction materials, machinery, plastic pellets, and rubber products is expected to grow by 9.9 percent to $120.93 billion, down from previous expectation of 17.8-per-cent expansion.