Thailand Plans To Maintain Market Share Following Vietnam's Currency Devaluation

[Lite Beer]

Thailand explores ways of maintaining market share after Vietnam devalues currency.

BANGKOK, Feb 13 - In an attempt to maintain market share in the global market after Vietnam devalued it currency dong, Thai Commerce Minister Pornthiva Nakasai has come up with three measures aimed at competing against cheaper Vietnamese goods.

In her instruction to Thai commercial attachés based overseas through the Export Promotion Department, Mrs Pornthiva said attempts must be made on maintaining market share for Thai goods in overseas, encouraging Thai exporters on lowering logistics costs, and to organise roadshows and goods exhibitions in key countries. which import Thai goods.

Last Friday, the State Bank of Vietnam devalued the dong currency in a bid to tackle its huge trade deficit and high inflation in the country.

The new reference rate is 20,693 dong per dollar, down from 18,932 in place since last August.

Friday's devaluation came after the ruling Communist Party last month set an economic framework for the coming years as its leaders noted a need to stabilise the macroeconomy. Because of the devaluation, Vietnam may overtake Thailand in rice exports, as Hanoi in 2010 was able to export rice of nearly 7 million tones worth more than US $ 3.23 billion, a new record both in terms of volume and earnings.

Currently, Vietnam ranks ninth among largest importer of Thailand's exports. In 2010, exported goods to Vietnam from Thailand were valued at more than US $ 5.84 billion, up 25 per cent from the previous year, and the country enjoyed a trade surplus of about $ 3.29 billion.

Key Thai exports to Vietnam are furnished oil products, plastic resin, iron and steel products, chemical products, automobile and parts, rubber products, air conditioners and parts, and motorcycles and parts.

The weakening dong may, however, benefit Thai investors in Vietnam. Some Thai businessmen have invested in textile and food processing businesses in that country, the Thai Commerce Ministry noted. (MCOT online news).

-- TNA 2011-02-13

[kuffki]

Hmmm, how would exporters lower the logistic costs? I thought logistics has to do with the courier company's.

Also having expo's does not really make any difference, since its expansive to import from Thailand now and will still be expansive to import from Thailand even with the expo.

Not only that, if someone can buy same product but cheaper, why would they buy more expansive?

Right now, i can not honestly think of 1 product from Thailand that is not available from the competitors at a cheaper price, starting from silk to electronics.

[Scott]

I'll leave it to the experts in business to discuss the finer points of this thread, but I have learned that cheaper is not better. I previously thought Thai products were inferior....then I bought a few things from China. Thai products look pretty good in comparison.

I know nothing about the quality of Vietnamese products.

I think the expos are meant to help market Thai products. And convince others that cheaper isn't necessarily better.

[kuffki]

I'll leave it to the experts in business to discuss the finer points of this thread, but I have learned that cheaper is not better. I previously thought Thai products were inferior....then I bought a few things from China. Thai products look pretty good in comparison.

I know nothing about the quality of Vietnamese products.

I think the expos are meant to help market Thai products. And convince others that cheaper isn't necessarily better.

I agree with you, but human nature always seeks out the cheapest price and when something looks the same but cost less, people chose the cheaper price. Because not many can determine the quality just by looking at it.

Also in the current market of countries falling apart, cheap is exactly what everyone is looking for

A perfect example is Index furniture. Its made in China and looks amazing, and costs really really cheap.

It does fall apart after a year or so. but locally made set same looking is 30 000 baht, Index is 10 000 baht. So even if it will fall apart after 1 year, i can still buy new 3 times before i get to locally made product price(hope i did not confuse anyone with the last sentence)

[TimeBandit2]

How much you wanna bet the next announcement out of the commerce ministry will be that Thai rice is "superior" to Vietnamese rice?

[ParadiseLost]

I would think they should be more worried about not meeting EU regulations on pesticides, etc. This has hit exports harder than any dong adjustment as countires like Vietnam will quickly step up and take their place.

Oh, and the expos... what better way for a few hiso individuals to get an all expenses paid holiday to rub shoulders with other self-indulgent glorified salesmen, of course they will continue this farce

Edited February 13, 2011 by ParadiseLost

[geriatrickid]

I would think they should be more worried about not meeting EU regulations on pesticides, etc. This has hit exports harder than any dong adjustment as countires like Vietnam will quickly step up and take their place.

Oh, and the expos... what better way for a few hiso individuals to get an all expenses paid holiday to rub shoulders with other self-indulgent glorified salesmen, of course they will continue this farce

Yes. The situation with the EU should be a concern, The USA is currently in protectionist mindset and if Thailand can't satisfy the EU, I think it is only a matter of time before the USDA and USFDA start having a go at expressing quality concerns. The emphasis needs to be on quality and standards. When the mad cow crisis hit the UK and Canada and devastated the beef sectors, the response was to improve monitoring and testing. One need only look at the different response between Thailand and North America when avian flu hits poultry producers. Quarantines and destruction of stock occurs quickly in North American Producers as unhappy as they may be, usually support it. Last time there was an issue in Thailand, the resistance to the government put all of Thailand's agricultural exports at risk.

Anyway, the plans in respect to the FX should have already been in place. By the time they get a plan into effect, importers will have already made some of their purchases. Personally, as sympathetic as I am to Vietnam, I don't have the same confidence since the USA & EU already have boots on the ground visiting Thai facilities. Of course, the typical consumer like me often has no idea where many of the foods purchased comes from since restaurant chains and food processors don't label their packages with information such as, rice sourced from Vietnam or bamboo shoots from Thailand.

[Bagwan]

http://www.bbc.co.uk/news/business-12401237

Just when you thought things were getting better ...........................

[Bagwan]

http://www.bbc.co.uk/news/business-12401237

Just when you thought things were getting better ...........................