Thai Exports surge by 10.2 percent in November

2014-04-10_002An unexpected 10.2 percent year-on-year surge in exports for the month of November fueled optimism that the Thai economy is firmly on track for solid growth as shipments of both agricultural and industrial goods increased to nearly every important market among Thailand’s trading partners, the Ministry of Commerce reported last week.

The strong rise in exports defied predictions by most analysts including those at the Bank of Thailand, and led to officials now forecasting a slight rise in exports for the year after three straight years of declines. The Bank of Thailand had previously predicted that exports would fall 0.6 percent in 2016, while others had predicted as much as a 2 percent contraction.

Although the central bank has so far maintained its outlook that exports will be flat next year, the Ministry of Commerce is now confident Thai exports will grow between 2.5 and 3 percent in 2017. Exports have been the most important engine of Thai economic growth for half a century and remain so despite the efforts of several government administrations to rebalance the economy to be more reliant on investment and consumption.

Although imports also increased in November by 2.97 percent year on year, Thailand still registered a trade surplus of $1.54 billion, with exports totaling $18.9 billion and imports adding up to $17.3 billion.

Pimchanok Vonkorpon, deputy director-general of the ministry’s Trade Policy and Strategy Office, said there was a good chance that export growth in December would top 3 percent on recovering demand in many markets. Higher agricultural exports, especially rubber and sugar, and higher oil prices along with the weaker baht would propel the better export performance, she said.

Ministry of Commerce officials said that rising oil prices had pushed prices for Thai agricultural commodities and other oil-related products, such as plastics, higher.

Food and agricultural production are among Thailand’s strengths, and several agricultural commodities displayed healthy export growth in November. Shipments of rice grew by 25.9 percent, rubber by 15.6 percent, tapioca by 18.4 percent and chicken by 20.8 percent.

Industrial goods also showed renewed strength, increasing by 9.8 percent in November after falling 2.7 percent in October. Shipments of hard disk drives were up 11.9 percent, after a 7.7 percent drop the previous month, plastics were up 10.5 percent and electrical appliances were up by 10.3 percent.

China took in 12.8 percent of Thai exports, the United States 11.2 percent, Japan 10.6 percent and the European Union 9.1 percent.