Shippers casts doubt on 8pc export growth in 2019
THE country’s largest shippers group expects export growth of a mere 5pc next year amid the deepening trade war between the US and China, despite a 90-day ceasefire.
Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers’ Council (TNSC), said export growth in 2019 will be much lower than the lofty 8pc outlook set by the Commerce Ministry.
“Shippers are concerned about the uncertain trade policy between the two giant economies and the effect it has on slowing the global economy,” she said. “Their argument affects the entire world supply chain, and Thailand cannot avoid being a part of the supply chain because the country is a global manufacturing hub.”
Ms Ghanyapad said low crop prices will pressure trade through next year.
The Commerce Ministry has projected export growth of 8pc to US$276 billion in 2019, or an average of $23 billion per month.
The 2019 export growth target for each market consists of Southeast Asia at 8.3pc, China and Hong Kong at 12pc, South Asia at 8pc, Russia and the Commonwealth of Independent States at 10pc, East Asia at 7pc, the EU at 3pc, North America at 6.1pc, the Middle East at 3pc, Latin America at 6pc and Australia at 6pc.
For 2018, the TNSC estimates export growth of 8pc under the assumption that the baht averages 33 to the US dollar and positive factors from the online platform.
“The penetration of e-commerce has pushed export growth amid risks from the trade war,” Ms Ghanyapad said.
Thailand’s export sentiment has signalled growth from the beginning of the year, except in September, but shipments picked up to rise 8.7pc to $21.75 billion in October.
The key factor is global oil prices. Once prices average $60-70 per barrel, purchasing power will increase in the oil-producing countries, the Commerce Ministry said.
For the first 10 months, Thai exports rose 8.2pc on the same period last year to $211.48 billion.
The trade surplus for the period stood at $2.56 billion as import value rose 14.8pc to $208.9 billion.
Shipments of agricultural and agro-industrial products increased from January to October, including for sugar, tapioca products, fresh and frozen chicken, and fresh vegetables and fruits, especially durian.
Traditional markets grew well, including the US (5pc), the EU (2pc) and Cambodia, Laos, Myanmar and Vietnam (5pc).
Ms Ghanyapad said exporters have proposed that the government oversee and stabilise the baht to be competitive among trade competitors in the region.
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office, said the government is optimistic after China and the US agreed to suspend additional tariffs in a deal that keeps their trade war from escalating for now.
The new agreement came over the weekend at the G20 summit in Argentina.
The US will not increase tariffs on $200 billion in Chinese goods from 10pc to 25pc on Jan 1 as previously announced, with the two sides aiming to reach an agreement within 90 days.
“It will have a better result for global trade and the economy, as well as support trade growth after suffering from this tension,” Ms Pimchanok said. “Moreover, the investment and trade will turn positive and ease pressure on the global financial and capital markets.”
She said Thailand’s exports will benefit from the 90-day grace period for goods such as electronics for raw materials to serve manufacturing in China, the segment previously most effected by the trade war.
“Once the trade dispute can be solved in a positive way, Thai exports will grow more than 8pc in 2019,” Ms Pimchanok said.
But the government is still concerned about a US plan to impose import tariffs on automobiles and parts. That scheme is in the process of a hearing under safeguard measures. –