Strengthening baht, shortage of migrant workers worry exporters as markets look up

[webfact]

Strengthening baht, shortage of migrant workers worry exporters as markets look up

By The Nation

 

 

Thai exporters are upbeat about business prospects, citing gradual increase in demand, but they are worried about the baht strengthening as well as the shortage of migrant workers.

 

The Thai National Shippers’ Council (TNSC) has revised upward its export projection this year to 8 per cent contraction from 10 per cent contraction previously forecast, says Ghanyapad Tantipipatpong, the council chairman.

 

Products in demand include rubber gloves, washing machines, fax machines, telephones and parts, and gold, she noted.

 

Demand for Thai products have risen as many countries have eased Covid-19 lockdown restrictions. Demand for basic need products, such as canned food, farm products, processed farm products have risen, and the coming Christmas and New Year seasons would further boost demand, she said.

 

Thailand’s exports in August amounted to $20.2 billion, falling 7.94 per cent, against imports of $15.86 billion, dropping 19.68 per cent. Exports in the first eight months contracted 7.75 per cent, amounting to $153.37 billion.

 

However, there are many negative factors. Consumer purchasing power remains weak due to the global recession. So, Thai exporters should focus on necessity products and products whose prices were not high, she said.

 

The baht remains strong and can be an obstacle for exports, as it makes Thai products more expensive than products of competitors. The baht should stay at around Bt34 per dollar, down from the current Bt31 level,  or it must move along with regional currencies, she said. 

 

A shortage of migrant workers is also adversely affecting businesses, she complained.  The rise of logistics cost, including freight cost, is also a cause for concern, she pointed out.

 

She said exporters want newly appointed Finance Minister Arkhom Tempittayapaisith to deregulate exchange rate regulations. The government should also provide financial aid to those who have not yet been supported by previous measures, she added.

 

Meanwhile, Visit Limluecha, vice chairman of the TNSC, said the US presidential election in November may have an impact on Thai exports. If Democrat Joe Biden wins the election, the US government may implement more free trade policies than incumbent President Donald Trump, he added.

 

Source: https://www.nationthailand.com/business/30395722

 

-- © Copyright The Nation Thailand 2020-10-07

 

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[crazykopite]

???? Fax Machines ???? and there was me thinking they were obsolete in this day an age . These guys are kidding themselves if they think a few 1,000 rubber gloves are going to turn around the economy Thailand is becoming a broken economy they are about to tumble off the top of the cliff and it’s all down to those elitists running the country ☹️☹️☹️☹️

[Deli]

Millions of Thai people out of work => missing the labor of migrant workers... Tells a lot

[Isaan sailor]

Complex problems—simple solution:  bring that damned Baht down.

[Rookiescot]

Have they factored in the expected loss of rice exports this year?

[pkrv]

2 minutes ago, Rookiescot said:

Have they factored in the expected loss of rice exports this year?

But the hero general is promoting Kor Khor 43 rice to save the day and improve everyone's health! ????

[robblok]

6 minutes ago, Isaan sailor said:

Complex problems—simple solution:  bring that damned Baht down.

Tell me how in your own words the government would bring the baht down ?

 

Its not as if a government can do much to influence it. The interest is low already can't do much with that.

 

The market will have to correct this by itself. As long as imports go down more then exports the the baht will stay strong. 

 

Maybe the move of trading gold in U$ dollars would help if it is done. Otherwise there is not much the government can do. Just need the market handle it by exports going down because of the Baht then less demand for Baht and a lower price. 

[dimitriv]

7 minutes ago, robblok said:

The interest is low already can't do much with that.

 

They can. Many countries now have negative interest rates. Enough reason to buy more TBH. High demand for the TBH with the result that the price will go up.

[robblok]

1 minute ago, dimitriv said:

 

They can. Many countries now have negative interest rates. Enough reason to buy more TBH. High demand for the TBH with the result that the price will go up.

They times they have changed the interest the effects were nowhere near the change they want (2bt to the dollar). I am not sure if you have seen the response when they lowered it ? At most like half a baht of difference. 

 

 

[dimitriv]

9 minutes ago, robblok said:

They times they have changed the interest the effects were nowhere near the change they want (2bt to the dollar). I am not sure if you have seen the response when they lowered it ? At most like half a baht of difference. 

 

 

 

But even after lowering it, the interest is still better than a negative interest rate. I mean, for banks with billions on their balance sheet, half a percent more or less makes a very big difference. 

 

Same for companies importing things into Thailand getting their money in TBH. Would you exchange that to Euro's now and transfer it to a EU country, knowing that you have to pay a negative interest rate? Or maybe it's better to keep your money in Thailand where you get at least 0.5% ?

 

I am also curious how Thailand can be a gold exporter. Do they have an unlimited supply of it they can sell again and again?  

 

Edited October 7, 2020 by dimitriv

[robblok]

8 minutes ago, dimitriv said:

 

But even after lowering it, the interest is still better than a negative interest rate. I mean, for banks with billions on their balance sheet, half a percent more or less makes a very big difference. 

 

Same for companies importing things into Thailand getting their money in TBH. Would you exchange that to Euro's now and transfer it to a EU country, knowing that you have to pay a negative interest rate? Or maybe it's better to keep your money in Thailand where you get at least 0.5% ?

 

I am also curious how Thailand can be a gold exporter. Do they have an unlimited supply of it they can sell again and again?  

 

It might make a big difference but the risk on currency is often not worth it. They need to hedge against that too. So it does not help as much as you might think. They dropped the interest quite a few times with only limited effect.

[hotchilli]

6 hours ago, webfact said:

Thai exporters are upbeat about business prospects, citing gradual increase in demand, but they are worried about the baht strengthening as well as the shortage of migrant workers.

No change there then.

[Isaan sailor]

34 minutes ago, robblok said:

Tell me how in your own words the government would bring the baht down ?

 

Its not as if a government can do much to influence it. The interest is low already can't do much with that.

 

The market will have to correct this by itself. As long as imports go down more then exports the the baht will stay strong. 

 

Maybe the move of trading gold in U$ dollars would help if it is done. Otherwise there is not much the government can do. Just need the market handle it by exports going down because of the Baht then less demand for Baht and a lower price. 

Peg the Baht to the USD.  Or since they’re so enamored with the Chinese—peg it to the CCP Yuan. 

[robblok]

35 minutes ago, Isaan sailor said:

Peg the Baht to the USD.  Or since they’re so enamored with the Chinese—peg it to the CCP Yuan. 

That is easier said then done, besides they could be accused by the US of currency manipulation if they do so. 

[Estrada]

41 minutes ago, Isaan sailor said:

Peg the Baht to the USD.  Or since they’re so enamored with the Chinese—peg it to the CCP Yuan. 

The Baht has been pegged to the US$ Dollar for years, that's the problem. Good for certain purchasers of Trains for the BTS

[fulhamster]

29 minutes ago, robblok said:

That is easier said then done, besides they could be accused by the US of currency manipulation if they do so. 

And that's not already happening ??

[Isaan sailor]

22 minutes ago, Estrada said:

The Baht has been pegged to the US$ Dollar for years, that's the problem. Good for certain purchasers of Trains for the BTS

Desperate times call for desperate measures.  Or should they just let exports go, and to Hell with tourism?  Sure, they pegged the Baht to USD @ 25.  How well did that work out?  Peg it @ $34. And watch the economy flourish.

[AlfHuy]

The Baht is ready to dive when this sign pops up everywhere.

[AlfHuy]

555

Hey bus captain, I had just someone playing with my private affairs.

Please can I get the 20% discount? Krub

[HiSoLowSoNoSo]

Wonder who order all those fax machines, North Korea or some tribe far out in the Amazonas? 

[khunPer]

8 hours ago, webfact said:

A shortage of migrant workers is also adversely affecting businesses, she complained.

I presume this should give unemployed Thais a chance to chance work from turist industry to something else, with a demand for workers...????

[Sheryl]

4 hours ago, Deli said:

Millions of Thai people out of work => missing the labor of migrant workers... Tells a lot

 

There are not millions out of work.

 

Unemployment peaked at about 2.1% in July and is now a little lower (1.9% in August). That is indeed almost double the pre-COVID levels but it still does not translate into millions of people.

https://www.ceicdata.com/en/indicator/thailand/unemployment-rate

 

Depending on what age group you use to represent working age, it's about 600-800,000

 

Millions of jobs lost yes, but that does not mean millions unemployed. Most people do nto just sit there helplessly when they lose their job. They move, go back to their home province, seek out other ways to earn money etc.

[CGW]

25 minutes ago, Sheryl said:

Depending on what age group you use to represent working age, it's about 600-800,000

Your spinning government figures, whats the reality? you don't lose 35 million tourists and not have high unemployment, sure if you are the government and don't want to pay out any money you can fudge the numbers, have you seen the food lines that form in Pattaya when free food is being handed out, it's all well and good having a job, but a lot will not be earning anything like minimum wage.

People return to their home province, really? they left "home" as there was no work, now they go back there, not happening where I am.

[Eibot]

Can someone explain to me (in simple words) to an idiot like myself why the Baht is doing so damn well?

[Eibot]

37 minutes ago, Sheryl said:

Unemployment peaked at about 2.1% in July and is now a little lower (1.9% in August).

How does on measure this since hardly anyone pays tax? Do farmers count as "working" people? Does a whole farming family count as working? My brother in law is self employed but not doing anything since Covid19 due to lack of tourists. Do they consider this working than? 

[tomazbodner]

5 hours ago, crazykopite said:

???? Fax Machines ???? and there was me thinking they were obsolete in this day an age . These guys are kidding themselves if they think a few 1,000 rubber gloves are going to turn around the economy Thailand is becoming a broken economy they are about to tumble off the top of the cliff and it’s all down to those elitists running the country ☹️☹️☹️☹️

Fax machines are more popular than ever in Japan. Calls to scrap fax from multifunction printers (copiers) has been denied for many years as Japanese demand fax functionality. They are very much alive, only difference is that many are changing from analog phone line fax to digital fax servers, where scanned image is sent basically as an email to the fax server, which then locally transmits it over analog line in the country where it's supposed to be delivered. Also there are still cases where fax is accepted officially, where emails aren't unless they are digitally signed.

[Bender Rodriguez]

9 hours ago, webfact said:

the shortage of migrant workers.

so many thais out of work

 

did they really mean SLAVE labour ?

[Sheryl]

39 minutes ago, CGW said:

Your spinning government figures, whats the reality? you don't lose 35 million tourists and not have high unemployment, sure if you are the government and don't want to pay out any money you can fudge the numbers, have you seen the food lines that form in Pattaya when free food is being handed out, it's all well and good having a job, but a lot will not be earning anything like minimum wage.

People return to their home province, really? they left "home" as there was no work, now they go back there, not happening where I am.

 

What you see in Pattaya is a far cry from what is the case in most of the country.

[TheFreqFlyer]

5 hours ago, Deli said:

Millions of Thai people out of work => missing the labor of migrant workers... Tells a lot

Makes no sense whatsoever. Give the jobs to Thais first. THEN IF there remains a shortage, bring in the foreign workers. 

[Isaan sailor]

Thai government too proud to have to fix the Baht—so let it burn.