Achieving 15% Export Growth Target: Thai Analysis

[webfact]

ANALYSIS

Achieving 15% export growth target

Petchanet Pratruangkrai

The Nation

BANGKOK: -- The Commerce Ministry will face difficulties driving the country's export growth to the targeted 15 per cent this year, as shipments in the first four months dropped, not only from the impact of last year's floods, but because of the economic sluggishness in the European Union.

During a meeting of 66 ministry commercial counsellors from overseas in Bangkok yesterday, the International Trade Promotion Department lowered its export-growth target slightly to 14.86 per cent, from the previous projection of 15.52 per cent, based on an anticipated slowing of shipments to the EU and Russia.

Early this year, the department projected that exports to the 27 countries of the EU would grow by 10 per cent. However, it has lowered that to only 5 per cent, as Europe's financial crunch persists. Thai exports to the EU contracted by 15.6 per cent during the first four months of the year.

It also lowered the projection for Russia and Eastern Europe from 25-per-cent expansion to 5 per cent. Shipments to Russia dropped by a significant 13.49 per cent in the first four months on negative impacts from the EU on that country's economy. Deputy Commerce Minister Poom Sarapol admitted that to grow exports by the targeted 15 per cent to US$262 billion (Bt8.3 trillion) would be a tough task.

Besides global factors, the effects of last year's flood disaster on Thai industries and farming have lasted longer than expected. Moreover, rising costs of fuel and labour have decreased Thai export competitiveness in some industries.

Nuntawan Sakuntanaga, director-general of department, said it would be a tough mission for every trade counsellor overseas to help drive exports to the target.

"As Thai shipments have dropped by 3.9 per cent in the first four months, export to each target market needs to return to growth of at least 20 per cent monthly starting in June so that Thailand will achieve the 15-per-cent growth target this year," Nuntawan said.

Duangkamol Jiambutr, executive director of the Thai Trade Centre in Frankfurt, Germany, said the unsettling of the Greek government had continued to affect European consumers' confidence. A shortage of Thai products due to the flooding last year has also encouraged some German importers to turn to other nations. However, if the EU revises its policies and stimulates spending, the EU economy should gradually recover, growing by 1 per cent next year, from flat growth this year.

Adul Chotinisakorn, executive director of the Thai Trade Centre in Mumbai, said the Indian

economy had been hit hard by the EU crisis as many European investors had withdrawn their investment.

Thai shipments to India are projected to grow by 20 per cent this year, having expanded by 3.2 per cent in the first four months.

The trade representative in Shanghai, Wimon Jarusathiti, said the economy in China had also been hit hard by the EU slowdown as its trade depends heavily on Europe and the United States.

Thai export to China is targeted at 20-per-cent expansion this year, from 1.4-per-cent growth in the first four months. Phatai Sooksommai, executive director of the Thai Trade Centre in Tokyo, said export of major products, mainly electronic goods, had dropped a lot because of the floods. However, food exports have continued to increase.

Thai shipments to Japan are projected to grow by 10 per cent this year, despite 6.9-per-cent contraction in the first four months.

Natapong Boonjing, executive director of the Thai Trade Centre in Dubai, said the high price of Thai rice had reduced demand in the Middle East. The sanctions against Iran have also created difficulties, he said. However, the centre projects that export of Thai chicken will bolster the export figures, after Bahrain recently lifted its export ban on fresh poultry from the Kingdom.

Growth of exports to the Middle East is targeted at 12 per cent this year, from 0.25 per cent expansion in the first four months.

Targeted export growth figures to other major destination include 10 per cent in the US, 15 per cent in Africa, 20 per cent in Asean, 25 per cent in Indochina including Myanmar, 15 per cent in Latin American, 15 per cent in South Korea, 10 per cent in Australia, and 10 per cent in Canada.

-- The Nation 2012-05-26

[trainman34014]

I see no mention of Thailand's overpriced Rice and its failure to be compete with its neighbours who are now taking huge chunks of the market.

[rubl]

"As Thai shipments have dropped by 3.9 per cent in the first four months, export to each target market needs to return to growth of at least 20 per cent monthly starting in June so that Thailand will achieve the 15-per-cent growth target this year," Nuntawan said.

...

Targeted export growth figures to other major destination include 10 per cent in the US, 15 per cent in Africa, 20 per cent in Asean, 25 per cent in Indochina including Myanmar, 15 per cent in Latin American, 15 per cent in South Korea, 10 per cent in Australia, and 10 per cent in Canada.

Difficult to say how this all adds up to an expected export value of US$262 billion (Bt8.3 trillion) for 2012. Still the remark on the need for 20% monthly grow starting July and the first four months showing a 3.9% drop doesn't sound good