The Russia-Ukraine conflict and rising production costs are pressuring Thailand’s export sector, the Thai National Shippers’ Council (TNSC) reports.
Thailand’s export value in the first two months this year was $44.74 billion, up 12.2 per cent year-on-year, the TNSC said at the weekend.
Exports were worth $21.25 billion in January and $23.48 billion in February, up eight per cent and 16.2 per cent, respectively.
TNSC chairman Chaichan Charoensuk said January-February exports expanded strongly on orders made before Russia began its military offensive against Ukraine on February 24.
He expects Thai exports in the first quarter to expand around five per cent year-on-year before falling below five per cent in the second quarter under pressure from the Russia-Ukraine conflict and the resulting rise in production costs.
“The price of Thai export goods has increased by five to 10 per cent,” he added.
The TNSC, trade associations and industries concluded on March 25 that the conflict would drag on and continue to drive up prices of raw materials, Chaichan said.
Russia’s ban on exports of crude oil, natural gas and rare minerals, as well as economic sanctions on Moscow, were affecting many industries, he added.
However, five major Thai exports – rubber and rubber products, foods, cassava products, sugar and rice – would help lift revenue amid the Russia-Ukraine crisis.
“Meanwhile, tyres, textiles, auto parts, plastic beads and electrical appliances will also boost Thai exports,” he added.
Chaichan warned, however, that the microchip shortage in the automobile industry should be tackled urgently as Russia’s ban on exports of chip materials would exacerbate the issue.
TNSC cut its forecast for Thailand’s export growth this year from five-to-eight per cent to no more than five per cent. Thai exports would drop further if the Russia-Ukraine conflict drags on and sparks further inflation and contraction of the global economy, Chaichan added.
Meanwhile, Thailand and Vietnam have pledged to tighten economic cooperation in a bid to push the value of bilateral trade to $25 billion by 2025.
The resolution was made at a discussion between the Thai ambassador to Vietnam, Nikorndej Balankura, and Vietnam Prime Minister Pham Minh Chinh in Hanoi on March 31.
THE NATION (THAILAND)/ASIA NEWS NETWORK