THE COMMERCE Ministry intends to turn a crisis into opportunity by tapping new markets that have emerged as a result of the escalating US-China trade war.
The ministry aims to push exports to the United States through food diplomacy while also aiming to boost its food and agricultural exports to Cambodia, Laos, Myanmar and Vietnam (CLMV). The export growth target for 2018 has been set at 8 per cent.
“It is undeniable that the US-China trade war has both direct and indirect negative impacts on Thai exports. This has led to a contraction of exports in September by 5.2 per cent year on year to US$20.699 billion. However, there are also indirect benefits to Thailand from the ongoing trade war, which Thailand needs to capitalise on,” the director-general of the Commerce Ministry’s Trade Policy and Strategy Office, Pimchanok Vonkorpon, told a press conference on Monday.
“Many Chinese goods are losing market share in the US because of the imposed tariffs. This has opened up gaps in the market which Thai products can fill,” she said.
“Moreover, to mitigate our risks, Thailand needs to diversify its export markets and start looking beyond China. We need to shift our approach in how we analyse foreign markets and start targeting more niche groups of customers instead of looking at foreign markets in a macro scope,” she said.
“One way Thai businesses can break into the US market is through food diplomacy,” added Banjongjitt Angsusingh, director-general at the ministry’s Department of International Trade Promotion.
Food diplomacy refers to the use of Thailand’s cultural and culinary influence in foreign markets to boost Thai exports, she explained.
For example, there are many Thai restaurants across the US. In supporting these businesses, Thailand can boost its exports of key seasoning ingredients used in Thai food, creating a new way for Thailand to penetrate the US market, Banjongjitt said.
Thailand’s food exports remain strong despite falling from $2.07 billion in August to $1.7 billion in September. From January to September, food exports amounted to $15.99 billion, according to the ministry, a 9.1-per-cent growth year on year.
“Another key region where Thai exports still have potential to grow are CLMV countries,” said Banjongitt.
In the first nine months of the year, Thai exports to CLMV were valued at $21.63 billion, growing 19.4 per cent compared to the same period last year.
“Food and agricultural goods have a strong potential to grow in global markets despite the US-China trade war, especially in CLMV markets,” said Banjongjitt.
“Thai goods perform well in the CLMV region because these countries have high trust in the quality of Thai goods, even more so than Chinese goods,” she added.
“Moreover, the CLMV economies are growing at a very fast rate, leading to an emerging middle class that demand higher-quality products. This presents a very promising opportunity for Thai agricultural goods as Thailand exports high quality fragrant rice as well as other dry fruits,” she explained.
Thai rice exports remain strong despite falling from $485 million in August to $468 million in September. Rice exports in the first nine months amounted to $4.1 billion.
“To expand exports of these goods, Thailand needs to start targeting niche markets. The demand for organic, healthy and environmentally friendly goods is growing in the CLMV region and globally,” Banjongjitt said.
“Hence, Thailand needs to capitalise on this rise in demand. To reduce costs, we also need to develop stronger agricultural logistics, encourage Thai firms to move production bases to CLMV countries and promote the use of e-commerce. This will make Thai goods more competitive in these foreign markets,” she said.