Strong baht takes a toll on Thai tapioca export revenue

[webfact]

Strong baht takes a toll on Thai tapioca export revenue

By The Nation

 

Credit:North Eastern Tapioca Trade Association

 

Farm products have a bright future in the Chinese market but the strong baht is leading to huge revenue losses, tapioca exporters said.

 

“The appreciation of the baht against the US dollar and the Chinese yuan has hit our revenue by up to Bt10 billion,” said Somboon Wattanavanichkul, president of the North Eastern Tapioca Trade Association.

 

Exporters want the baht in the range of Bt32 to the dollar in order to ensure price competitiveness of farm products in export markets, he said.

 

The baht currently trades at around Bt30 to the dollar, a five per cent appreciation since January this year. If the US Federal Reserve cuts its policy rate again, that would further strengthen the baht hence Thai authorities should look at the exchange rate market, he said. Thai exporters and their Chinese counterparts recently signed a memorandum of understanding (MoU) to trade 2.68 million tonnes of tapioca products -- chips and starch -- valued at $608 million (Bt18.464 billion). 

 

The MoU signing took place last week during the visit of a Thai delegation to China led by Commerce Minister Jurin Laksanawisit in a bid to export more farm products to China.

 

Chinese traders will import this batch of tapioca chips and starch between October this year and October next year.

 

Boonchai Srichaiyongpanich, president of the Thai Tapioca Trade Association, said that export demand is higher than Thailand’s tapioca production cane meet, leading to the rising price of cassava roots. The fresh root now sells at between Bt2.10 to Bt2.40 per kilogram.

 

Currently, Thailand has the capacity to produce about 30 million tonnes of tapioca. He said that production capacity should increase to 40 million tonnes to meet high export demand. Thailand could increase cassava root yields from 3.6 tonnes per rai to 5 tonnes per rai, he suggested. Total land area for plantation of tapioca in Thailand is estimated at 8 million rai.

 

From January to July, Thai traders exported 4.5 million tonnes of tapioca products value at $1.69 billion, down 11.63 per cent and 6.88 per cent respectively year on year. However, the Chinese export market remains promising as China is expected to import more cassava products to produce ethanol and feed meal, according to Thai exporters.

 

Source: https://www.nationthailand.com/business/30376801

 

-- © Copyright The Nation Thailand 2019-09-27

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[Cadbury]

Thailand's export killer, the baht factor. Rubber a few days ago, cars and car parts before that, rice yesterday and tapioca today. What will it be tomorrow? Electrical goods, gems, plastics?

Exports are getting hammering. Something has to give or will it be the easy way out with subsidy handouts to the producers/growers.

[legend49]

Keep the good news coming soon all exporters will complain, then Junta might drop the baht value, cheaper than paying out farm subsidies.

[RichardColeman]

I feel a Thai Government 'eat local' Tapioca pudding drive coming soon

[hotchilli]

7 hours ago, webfact said:

“The appreciation of the baht against the US dollar and the Chinese yuan has hit our revenue by up to Bt10 billion,” said Somboon Wattanavanichkul, president of the North Eastern Tapioca Trade Association.

But the PM has just said they've fixed the economy so it's a fair playing field for everyone, the wage divide will shrink to zero, everyone will be on a high income with no-one left behind????

Wheels falling of the wagon already?

[Isaan sailor]

Well, if Bank of Thailand would lay off the hot money inflows for a while—couple of months should do the trick—then the mighty Baht would sink enough to boost exports and perhaps lure some western tourists again....

[blackcab]

An off topic post has been removed.

 

 

[Darkside Gray]

Is there anything that the strong Thai Bhat isn't getting blamed for?

[kevin612]

Bring the baht back to 33.

[lannarebirth]

Tapioca for export is priced in US dollars which hit a 2 year high today against a basket of international currencies.

 

http://www.thaitapiocastarch.org/en/information/statistics/weekly_tapioca_starch_price

[White Christmas13]

10 minutes ago, kevin612 said:

Bring the baht back to 33.

Australian dollar?????

[Muhendis]

6 minutes ago, kevin612 said:

Bring the baht back to 33.

I liked it when it was 72...........

[Mavideol]

1 hour ago, kevin612 said:

Bring the baht back to 33.

and local economy / tourism/ exports and so forth, all will immediately start to show improvement hotel bookings (from everywhere including China) will increase

[Isaan sailor]

Thai Baht, the #1 reason for everything going down.  Not trade wars. Not low season, not TM30...

[Artisi]

12 hours ago, RichardColeman said:

I feel a Thai Government 'eat local' Tapioca pudding drive coming soon

Complete with a song and dance show from his truly... 

[Artisi]

2 hours ago, Isaan sailor said:

Thai Baht, the #1 reason for everything going down.  Not trade wars. Not low season, not TM30...

Correct, but the brown envelope contents are seeing a really great return being shipped off overseas - and guess who pulls the strings to maintain this little earner. 

[Tofer]

10 hours ago, Muhendis said:

I liked it when it was 72...........

Better still when it was 93 to the £.....

Edited September 27, 2019 by Tofer

[Soikhaonoiken]

Spot on post... 

16 hours ago, Isaan sailor said:

Well, if Bank of Thailand would lay off the hot money inflows for a while—couple of months should do the trick—then the mighty Baht would sink enough to boost exports and perhaps lure some western tourists again....

Spot on post...