Exports dropped 4% in August from a year earlier after an unexpected rise the previous month.
The Commerce Ministry reported on Friday customs-cleared outbound shipments fetched US$21.9 billion in August, largely thanks to front-loading imports to avoid the imposition of US tariffs starting on Sept 1.
Moreover, the uncertainty of trade disputes clouds the global economy, causing a slowdown in most of Thailand’s major trading partners, including Asean and South Asia, said the ministry.
Falling global oil prices suppressed exports of oil-related products and an oversupply of agricultural products in the global market as well as baht appreciation are still downside risks for Thai shipments. In the first eight months of 2019, Thai exports contracted by 2.2%, attracting $166 billion.
Thai exports to some major trading partners expanded, such as the US (+5.8%), Australia (18.4%) and the Middle East (5.3%). On the contrary, exports to China, Asean-5 (four of the five largest economies in Asean: Malaysia, Singapore, Indonesia and the Philippines) and CLMV (Cambodia, Laos, Myanmar and Vietnam) contracted -2.7%, -24.6%, and -22.7%.
Growth of shipments of agricultural and agro-industrial products decreased by 4.4%. Oversupply in the world market and baht appreciation are key factors suppressing exports of major agricultural products, namely rice (-44.7%), cassava products (-25.3%), and rubber (-7.2%).
However, some products still expanded favourably, such as fresh, frozen, and processed fruits (+26.8%), fresh and frozen chicken (+5.6%), and wheat products and other prepared food (+13.5%). In the first eight months of 2019, agricultural and agro-industrial products contracted -2.1%.
Industrial products also dropped 1.9%, largely the result of lower exports of automobiles to Australia and Asean. Yet some industrial products still registered growth, such as gold (378%), jewellery and accessories (51.1%), motorcycles and parts (9.2%). In the first eight months of 2019, industrial products contracted 1.5%.
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, said a variety of challenges, namely the global economic slowdown, a prolonged trade dispute between the US and China, and baht appreciation casts a shadow over Thai exports for the rest of 2019.
In the second half of 2019, the ministry set an export growth target of 3%, maintaining mature markets, expanding to new areas, and restoring trade with long-lost trading partners, she said.