Slump in exports ‘worse than expected’ amid low oil prices

[snoop1130]

Slump in exports ‘worse than expected’ amid low oil prices
The Nation

THAILAND -- EXPORTS are now expected to contract by 5.5 per cent to US$215 billion this year, worse than the previous projection of a 3-per-cent decline, due to the continued slide in oil prices in the world market.

This the third straight year of backsliding, but for next year, the Commerce Ministry is looking for a return to the growth path. Its 2016 forecast is for a 5-per-cent increase to $225 billion, reflecting the brighter picture for global trading, which is expected to bounce back from a shrinkage of 11.2 per cent to an expansion of 2.4 per cent.

The ministry reported that in the first 11 months of this year, shipments were off 5.5 per cent to $197.27 billion (Bt6.61 trillion), while imports declined 11.2 per cent to $187.04 billion.

In November alone, exports were down 7.4 per cent to $17.16 billion, while imports fell 9.5 per cent to $16.86 billion. Thailand locked in atrade surplus of $10.23 billion in the first 11 months, after adding $298 million last month.

"Oil and products from oil account for more than 10 per cent of total export value. Expected continuing falling oil prices will still be a risk factor for Thai exports next year," Somkiat Triratpan, director of the Commerce Ministry's Policies and Trade Strategies Bureau, said Monday.

Source: http://www.nationmultimedia.com/breakingnews/Slump-in-exports-worse-than-expected-amid-low-oil--30275826.html

-- The Nation 2015-12-28

[ratcatcher]

Reality check maybe?

[thesetat2013]

Since Thailand has no oil that I am aware of "perhaps I am wrong"! How can the price of oil change the total exports for Thailand? Enlighten me if you can.

[namatjira]

Reality has to kick in eventually

[JOC]

Since Thailand has no oil that I am aware of "perhaps I am wrong"! How can the price of oil change the total exports for Thailand? Enlighten me if you can.

Since Thai people under the leadership of The Royal Thai Government can't do anything wrong, anything gone bad has to be blamed on external factors !!

Last year almost everything was blamed on high oil prices....................

Thai logic, you get used to it.....................

[FloridaExport]

Since Thailand has no oil that I am aware of "perhaps I am wrong"! How can the price of oil change the total exports for Thailand? Enlighten me if you can.

I haven't taken economics since high school, but I believe the drop in oil prices affected many oil producing countries around the world. This led to many countries' economies contracting which led to less importing by those countries. When countries do not import as many good as they used to, it effects exports in other countries.

Also, Thailand does drill for oil, but I'm not sure if they actually export. Queen Sirikit Oil field is about half way between the northern border of Thailand and Bangkok. I believe they have some offshore drilling as well.

Edited December 28, 2015 by FloridaExport

[SoFarAndNear]

Since Thailand has no oil that I am aware of "perhaps I am wrong"! How can the price of oil change the total exports for Thailand? Enlighten me if you can.

Thailand is producing crude oil for nearly 4 decades....

http://www.indexmundi.com/energy.aspx?country=th&product=oil&graph=production

Edited December 28, 2015 by SoFarAndNear

[Jim walker]

First thing to do is dont panic just make it more difficult for foreigners to live here and spend their hard earned money a good clamp down on visa overstays is the best way to go that will make up for the drop in oil prices.

[Srikcir]

Since Thailand has no oil that I am aware of "perhaps I am wrong"! How can the price of oil change the total exports for Thailand? Enlighten me if you can.

Thailand does not export raw crude oil per se but rather refined oil and oil-based products.

The cost to manufacture refined oil and oil-based products is largely fixed. So when there is an oil price slump, profit margins begin to disappear. That in turn affects exports.

[webfact]

Slump in exports ‘worse than expected’ amid low oil prices
PETCHANET PRATRUANGKRAI,
ERICH PARPART
THE NATION

BANGKOK: -- EXPORTS are now expected to contract by 5.5 per cent to US$215 billion this year, worse than the previous projection of a 3-per-cent decline, due to the continued slide in oil prices in the world market.

This the third straight year of backsliding, but for next year, the Commerce Ministry is looking for a return to the growth path. Its 2016 forecast is for a 5-per-cent increase to $225 billion, reflecting the brighter picture for global trading, which is expected to bounce back from a shrinkage of 11.2 per cent to an expansion of 2.4 per cent.

The ministry reported that in the first 11 months of this year, shipments were off 5.5 per cent to $197.27 billion (Bt6.61 trillion), while imports declined 11.2 per cent to $187.04 billion.

In November alone, exports were down 7.4 per cent to $17.16 billion, while imports fell 9.5 per cent to $16.86 billion. Thailand locked in a trade surplus of $10.23 billion in the first 11 months, after adding $298 million last month.

"Oil and products from oil account for more than 10 per cent of total export value. Expected continuing falling oil prices will still be a risk factor for Thai exports next year," Somkiat Triratpan, director of the Commerce Ministry's Policies and Trade Strategies Bureau, said yesterday.

The ministry estimates that the oil price next year will continue to drop from an average of $51.60 per barrel this year to $50.40. This would hit trade to many markets that depend heavily on oil sales.

If oil prices continue to deteriorate, not only will many oil-based products be affected, but also agricultural crops, mainly rubber.

As of November, the average oil price this year was $42.32 per barrel, but in December, it weakened to $36 per barrel.

Exports of agro-industrial products have crumbled in the first 11 months by 7.2 per cent, and those from other industries by 3.7 per cent. Exports to most markets were down, except to Cambodia, Laos, Myanmar, Vietnam (CLMV), Australia, Latin America and the United States. Exports increased by 7.8 per cent to CLMV, 6 per cent to Australia, 0.2 per cent to Latin America and 1.4 per cent to the US.

Ripples from Myanmar people's protest against the Koh Tao murder verdict have not yet reached two-way trading. Border shipments from Thailand to Myanmar still grew by an average of 20 per cent.

Border trade

Two-way border trade with the four adjacent countries - Malaysia, Myanmar, Laos and Cambodia - rose by 6.4 per cent to Bt957.79 billion in the first 11 months of this year. Outbound border trade increased 4.4 per cent to Bt561.74 billion, while inbound trade rose 9.5 per cent to Bt396 billion.

Despite the declining sales overseas for Thai goods, sales abroad of the service sector climbed strongly by 14.8 per cent in the first nine months of this year to $44.42 billion.

Tourism is the strongest driver of Thai service exports this year. Exports of tourism services soared 21.9 per cent to $32.3 billion, which was 72.7 per cent of total service exports, Somkiat said.

Kulaya Tantitemit, director of the Fiscal Policy Office's Macroeconomic Policy Bureau, said the FPO still saw exports picking up next year, but it would be by less than the 2.5 per cent that had been predicted.

The contraction of 5.5 per cent in the past 11 months is already bigger than the FPO's current contraction projection of 5.4 per cent for this whole year.

The export sector will continue be one of the drags on the economy next year, as it accounts for 65-70 per cent of gross domestic product.

It will continue to be a victim of the softening of global demand, as many major trading partners are still gradually recuperating while China is faltering.

"It can be seen now that the global economy, which was expected to improve by a bigger margin than this year, is now only expected to recover gradually or be better than this year but not by much," she said.

The exchange rate is also expected to be volatile from the divergence in the monetary policies of advanced economies.

The estimated low crude-oil price of about $50 per barrel on average in 2016 will continue to put pressure on agricultural prices, which is a major part of the country's export sector.

Source: http://www.nationmultimedia.com/business/Slump-in-exports-worse-than-expected-amid-low-oil--30275818.html


-- The Nation 2015-12-29

[gandalf12]

Since Thailand has no oil that I am aware of "perhaps I am wrong"! How can the price of oil change the total exports for Thailand? Enlighten me if you can.

Thailand is producing crude oil for nearly 4 decades....

http://www.indexmundi.com/energy.aspx?country=th&product=oil&graph=production

True they have, but not in significant quantities to make any difference on the world market. They are not a major player in the industry. As far as I am aware they import oil in addition to what they produce.

[Thian]

With less then 40 baht for the euro i don't see Thai exports increase....

[retarius]

And yesterday's prediction was 5%….

[IAMHERE]

May I suggest an 'Export Subsidy Scheme' ?

[spidermike007]

Korn was the last finance minister with talent, intelligence and experience. Since then only crony appointments devoid of skill or experience in their fields have been the norm. How do you get a guy without expertise to run a $550 billion economy? The answer is you don't. He will fail as he is failing. Get an expert. Then you can expect decent results. Get a clown. Then you can expect what you have. A slumping economy. Slumping exports. Etc. So many things could be done to stimulate the economy. Lower import duties, especially in regard to the wine industry, which could be a multi billion dollar industry without the churlish and childish protectionist duties we currently see. Other than that, it would be necessary to stimulate several very sluggish and inferior brains, who create policy.

Edited December 29, 2015 by spidermike007

[Melyn]

I note that there was no mention of either rice or seafood....

[Usernames]

Placing most of their bets on China was/is a big mistake. Combine a Chinese collapse with possible sanctions on Thai food exports to the US/Europe and you have a disaster.

[SOUTHERNSTAR]

Korn was the last finance minister with talent, intelligence and experience. Since then only crony appointments devoid of skill or experience in their fields have been the norm. How do you get a guy without expertise to run a $550 billion economy? The answer is you don't. He will fail as he is failing. Get an expert. Then you can expect decent results. Get a clown. Then you can expect what you have. A slumping economy. Slumping exports. Etc. So many things could be done to stimulate the economy. Lower import duties, especially in regard to the wine industry, which could be a multi billion dollar industry without the churlish and childish protectionist duties we currently see. Other than that, it would be necessary to stimulate several very sluggish and inferior brains, who create policy.

Unfortunately it is beyond the control of the Thai government. At present all export countries are suffering (China, South Korea, Japan, Taiwan etc). The world economy is in a slump and deflation have set in economies of the EU, US and Japan. Proof of this is very low sea freight rates, plummeting ship building and freight company mergers. The deflation side is clear with the EU, US and Japans inflation rates below their targets. The only way to increase the Baht value of exports is to depreciate the Thai Baht with 20% plus. This will however increase the cost of imported goods and services. There are however no way (under present conditions) to increase the USD value of Thai exports without restructuring the Thai economy. The economy needs to move away from old technology exports to high/new technology export products, but to do that they need to have highly skilled workers. These workers can be imported or the country can produce them. I my view there is no way that the Thai government will allow a large scale importation of skilled labour as this would endanger their elitish children's jobs and the business friends empires. To produce these highly skilled labour force themselves they need to restructure/revamp the Thai education system. This process even if it starts today will take 18 years plus to generate the workforce needed. The other problem is then they will have highly educated people that will start to ask difficult questions.

[i claudius]

Thailand , "jam yesterday ,jam tomorrow, but never jam today .

[taony]

Channel NewsAsia last night was saying it was the 11th straight month of decrease. But in Japan, November was only down for the first in three months. But that doesn't fit the agenda that Thailand is down because everywhere is down.

[cockatoowho]

Korn was the last finance minister with talent, intelligence and experience. Since then only crony appointments devoid of skill or experience in their fields have been the norm. How do you get a guy without expertise to run a $550 billion economy? The answer is you don't. He will fail as he is failing. Get an expert. Then you can expect decent results. Get a clown. Then you can expect what you have. A slumping economy. Slumping exports. Etc. So many things could be done to stimulate the economy. Lower import duties, especially in regard to the wine industry, which could be a multi billion dollar industry without the churlish and childish protectionist duties we currently see. Other than that, it would be necessary to stimulate several very sluggish and inferior brains, who create policy.

Can't agree more, but unfortunately the funny (self claimed) little man at the top believes only those wearing a military uniform are the experts. The rest; well they are either trouble makers and or idiots.

[HenryB]

It is time to raise prices 20 per cent do exports will be up by 15 per cent cash value

If that is not enough raise price another 20 per cent

[Time Traveller]

Since Thailand has no oil that I am aware of "perhaps I am wrong"! How can the price of oil change the total exports for Thailand? Enlighten me if you can.

They export refined petroleum. When oil prices are high, so too are the spreads between crude and refined products, hence higher export value. However, since crude oil is number one import by value, rising crude prices would possibly turn their trade balance negative despite rising exports.

[trogers]

Channel NewsAsia last night was saying it was the 11th straight month of decrease. But in Japan, November was only down for the first in three months. But that doesn't fit the agenda that Thailand is down because everywhere is down.

Japan and Thailand export very different goods, with the former exporting mainly high valued products.

[GeorgesAbitbol]

This oil price needs some "adjustment" and use of article 44 if necessary.

The low price for oil is without any doubt created by troublemakers who don t love thailand : thaksin, obviously is one of them...

[taony]

Channel NewsAsia last night was saying it was the 11th straight month of decrease. But in Japan, November was only down for the first in three months. But that doesn't fit the agenda that Thailand is down because everywhere is down.

Japan and Thailand export very different goods, with the former exporting mainly high valued products.

You didn't read my post: "Its 2016 forecast is for a 5-per-cent increase to $225 billion, reflecting the brighter picture for global trading"

They are trying to say, and always give the same excuse, that its not a Thai-only phenomenon. The Thai economy is going the same way as the world economy. But this is not always true.

edit: from the other thread, from NNT: "Mr. Somkiat claimed export slump was triggered mainly by slow global economy and declining global oil prices. Industrial and agricultural exports have also decreased by roughly the same at 7%, especially rubber and rice."

Edited December 29, 2015 by taony

[Doc46]

Who's telling these Porkies,,,,?

[sawadee1947]

..but for next year, the Commerce Ministry is looking for a return to the growth path.

There are no signs which will give you not even the slightest hope of growing. Just the opposite is right for Thailand. Thailand is the last of the 10 Asean states if it comes to growth. There is only one thing what is growing and that is competition.

[HenryB]

We all know it USA and Europe's fault because they are not buying.