Food industry hits alarm button over baht appreciation

[webfact]

Food industry hits alarm button over baht appreciation

By PHUWIT LIMVIPHUWAT 
THE NATION

 

File photo

 

Food industry representatives are urging the Bank of Thailand (BOT) and the Finance Ministry to address worries that the baht will appreciate this year, dampening exports and reducing the income of local farmers. 
 

The Board of Trade of Thailand, the National Food Institute (NFI) and the Federation of Thai Industries’ Food Processing Industry division have jointly set a Bt1.12 trillion target for export of food products. That would be an 8 per cent growth over last year’s Bt1.031 trillion in food exports.

 

“The strength of the Thai baht in the coming months of this year will be a key factor influencing whether this target is reached,” Poj Aramwattananont, vice chairman of Thailand’s Board of Trade told a press conference yesterday. 

 

The baht’s appreciation had damaged exports of food products in 2018, he said, especially in the first two quarters, and lowered incomes for those in the agricultural sector.

 

“Although the total exports of food products for 2018 stood at Bt1.031 trillion, growing only by 1.6 per cent year on year when calculated in US dollars, the total value of food exports stood at $32.19 billion, growing by up to 7.3 per cent year on year,” he said.  The appreciation of the baht resulted in the differing values and growth rates behind the two calculations, he explained to reporters.

 

Poj urged the BOT and Finance Ministry to work together to address the issue of the baht appreciating against other currencies, which hurts the income of farmers throughout the Kingdom.

 

“We are deeply concerned about the trend of the Thai currency as we saw in 2018 how damaging the appreciation can be to the food exports industry. Furthermore, both the BOT and the Finance Ministry have yet to show signs of concern on this issue,” he said.

 

“We urge the two institutions to come together, along with representatives of the private sector to discuss solutions to this risk factor.”

 

Last year, the Asean region was Thailand’s largest food export destination, followed by Japan, China and the US respectively. Poj warned that the baht has appreciated against all the currencies of the Kingdom’s top food export markets. 

 

The baht stood at Bt31.30 per dollar yesterday, appreciating from Bt33.27 at the end of October last year. 

 

In 2018, rice took up the largest portion of total food exports, valued at Bt180.116 billion and growing by 17.5 per cent year on year. The outlook for the country’s lead food export is dimmer this year, with rice exports forecast to reach only Bt165 billion, an 8.4 per cent year on year contraction. 

 

Source: http://www.nationmultimedia.com/detail/business/30363452

 

-- © Copyright The Nation 2019-02-04

[ukrules]

Exports will be completely and utterly decimated if the Baht appreciation continues.

 

Not a problem for the world, there's plenty of other countries out there who can supply the same goods and services at much cheaper prices.

 

[mok199]

New Zealand ground went up 18% this week..

[TPI]

Let's not talk about the effect it has on the income stream of retirees in the Kingdom!!!

[YetAnother]

50 minutes ago, webfact said:

address the issue of the baht appreciating against other currencies, which hurts the income of farmers throughout the Kingdom.

the elite are loving this; they have long ago lost any realization there so many poor farmers, they only realize their shopping trips to hong kong and singapore

[JAG]

4 minutes ago, YetAnother said:

the elite are loving this; they have long ago lost any realization there so many poor farmers, they only realize their shopping trips to hong kong and singapore

If you have children at University or school abroad, have or deal in property abroad, or just, as you suggest, travel and spend money abroad, then the appreciation of the Baht is "very much appreciated".

 

But I am sure that the very small number of Thais who fall into that group have no influence whatsoever upon those who guide monetary matters in the Kingdom ...

????

[chainarong]

The Baht is subjected to the same fluctuation as the OZ dollar, the OZ should be at a 85c against the USD, this gives exporters and tourists a margin and it also helps those who wish to leave the place .

[stanleycoin]

Local farmers , are screwed over by middle men and greedy companies

every day of the week.

Sure the government cares. 

[yellowboat]

1 hour ago, ukrules said:

Exports will be completely and utterly decimated if the Baht appreciation continues.

 

Not a problem for the world, there's plenty of other countries out there who can supply the same goods and services at much cheaper prices.

 

Yes, but the wealthy in Thailand wish to buy assets overseas.  What about their needs for luxury housing, sports teams, vintage wine, vineyards and super yachts?

 

The junta is not aware of the existence of other countries, unless they praise or criticize their government. 

Edited February 4, 2019 by yellowboat

[fruitman]

1 hour ago, ukrules said:

Not a problem for the world, there's plenty of other countries out there who can supply the same goods and services at much cheaper prices.

 

The other countries produce much cleaner food since the Thai farmers use loads and loads of chemicals. I'm happy to pay extra for food from abroad, don't want to get poisoned by a selfish Thai farmer.

[ChipButty]

As always the Bangkok elite are feathering their own nest and keeping their foot on the brown peoples throat

[jabis]

Wondered why my recent paycheck's have been so lean 35.7 - come on...

 

[JAG]

Now I freely admit to being a "bear of very little brain" when it comes to money.

 

Two questions really:

1) is the Thai Baht somehow maintained at an artificially high level?

2) if so is that sustainable?

[jabis]

Just now, Father Fintan Stack said:

Loving the Thai Baht exchange rate as I get paid in it.

 

I do too - the sources just mostly outside of the Kingdom, so not loving it ????

[happy chappie]

A lot of people making big money from the baht.people off shoring their assets for a start.brexit dropping the pound by 20% and British imports staying the same price or even going up.if the baht lost 20% to the pound tomorrow you may get more income on the exchange but then the importers will slap 20% on their goods saying they have to pay more.

[Cadbury]

35 minutes ago, ChipButty said:

As always the Bangkok elite are feathering their own nest and keeping their foot on the brown peoples throat

Nail on the head. Thank you.

Many of the ruling military junta generals are in that 1% filthy rich elite group and those who are not are mates with those who are. 

Military generals by tradition are not strong in economics but their history in government have shown themselves to be very strong in greed, self interest and nest feathering. 

Pity help the country if they remain in power disguised as a "democracy".

[The Old Bull]

Good for politicians or anyone else with offshore bank accounts.

[ZeVonderBearz]

3 hours ago, TPI said:

Let's not talk about the effect it has on the income stream of retirees in the Kingdom!!!

Obviously the number one concern for any country in the world is how well farang retirees are getting on in the country. 

[holy cow cm]

2 hours ago, happy chappie said:

A lot of people making big money from the baht.people off shoring their assets for a start.brexit dropping the pound by 20% and British imports staying the same price or even going up.if the baht lost 20% to the pound tomorrow you may get more income on the exchange but then the importers will slap 20% on their goods saying they have to pay more.

Importers have fixed pricing. Not just so easy to say price hike as doesn't happen easily. It hurts the whole system but not the retailers as they mainly refuse to absorb anything.

[Baerboxer]

5 hours ago, JAG said:

If you have children at University or school abroad, have or deal in property abroad, or just, as you suggest, travel and spend money abroad, then the appreciation of the Baht is "very much appreciated".

 

But I am sure that the very small number of Thais who fall into that group have no influence whatsoever upon those who guide monetary matters in the Kingdom ...

????

 

And now would be a very good time, with a strong baht, to build up offshore cash investments in USD and other currencies.

 

Again, the very small number who might possibly think of or actually do that have no influence whatsoever on those guiding monetary policy. Blame those wicked farang money speculators and forex dealers!

[JAG]

16 minutes ago, Baerboxer said:

 

And now would be a very good time, with a strong baht, to build up offshore cash investments in USD and other currencies.

 

Again, the very small number who might possibly think of or actually do that have no influence whatsoever on those guiding monetary policy. Blame those wicked farang money speculators and forex dealers!

You are surely not suggesting that there may be some "making hay while the sun shines"?

[rickudon]

On 2/4/2019 at 9:04 AM, happy chappie said:

A lot of people making big money from the baht.people off shoring their assets for a start.brexit dropping the pound by 20% and British imports staying the same price or even going up.if the baht lost 20% to the pound tomorrow you may get more income on the exchange but then the importers will slap 20% on their goods saying they have to pay more.

Greed is ridiculous here. While the Thai baht has appreciated against other asian currencies over the last couple of years, Imports from those countries (and other non-asian countries) have not fallen in price, in fact they have gone up! Someone in the supply chain is gouging huge profits from this.

 

One example - tin of baked beans produced in Malaysia has gone up 15% in the last year  (now 40 baht) but thai baht has gone up by 5% against the ringgit. So someone is seeing about  20% more profit .......  I refuse to buy them any more. I can buy in the UK a tin of supermarket own label for about 10 baht. Just one example. 

 

Tax on wine went up by over 50% last year. Cigarette taxes also increased, and due for big increases again this month.

 

Smuggling of all items is now getting more lucrative!