Thailand June exports continue to slump on U.S.-China trade row

23, Jul. 2019

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BANGKOK, NNA – Exports from Thailand in June posted the fourth straight month of year-on-year declines in light of slowing global demand amid the U.S.-China trade spat, prompting a senior Commerce Ministry official to project nearly flat export growth for the whole of 2019.

The Commerce Ministry released the latest monthly data on Monday.

Key points:

―― Exports shrank 2.2 percent from a year earlier to $21.41 billion after slumping a revised 6.2 percent in May. The June figure was firmer than the median economist forecast of a 5 percent decline. In April-June, exports dropped 3.8 percent to $60.98 billion, the least since an 8.1 percent fall in the final quarter of 2015.

―― Imports dipped 9.4 percent to $18.20 billion for the fifth consecutive month of decreases after a revised 0.7 percent drop in May. That was weaker than the median forecast of a 2.3 percent fall. In the April-June quarter, imports fell 3.6 percent to $59.05 billion.

―― Thailand had a trade surplus of $3.21 billion in June, widening from $181.5 million in May for second straight month in the black.

―― In the first half of the year, exports slipped 2.9 percent on year to $122.97 billion, marking the first half-year decline since a 1.4 percent fall in the first half of 2016. Exports gained 2.5 percent in the second half of 2018.

―― By country, exports to the United States rose 17.3 percent to $16 billion in January-June, while shipments to China sank 9.7 percent to $13.78 billion. Exports to the Association of Southeast Asian Nations declined 5.2 percent to $31.32 billion.

―― In the first half, shipments of farm products fell 2.2 percent to $20.32 billion, with rice contracting 17.2 percent to $2.29 billion and rubber dropping 10.4 percent to $2.18 billion. Exports of industrial products were down 2.6 percent at $98.12 billion, with vehicles and auto parts sliding 7.2 percent to $17.77 billion and electronic products and parts declining 10.6 percent to $17.21 billion.

―― Imports slid 2.4 percent to $119.03 billion for the first half-year drop since a 10.3 percent dip in the first half of 2016, after a 9.1 percent increase in the second half of 2018.

―― Thailand posted a trade surplus of $3.94 billion for the six months ended June, narrowing from a surplus of $62.5 million in the second half of last year.

Takeaway:

―― Pimchanok Vonkorpon, director-general of the ministry’s Trade Policy and Strategy Office, told reporters on Monday that exports were likely to worsen in the July-September quarter before showing signs of a pickup in October-December.

―― The new deputy prime minister and Commerce Minister, Jurin Laksanawisit, has set up a joint committee between the government and the private sector to discuss measures to promote exports, Pimchanok said. Some companies are moving factories to Thailand from China to avoid higher U.S. tariffs, which should support Thai exports, she added.

―― But Pimchanok is cautious about Thailand’s export performance for the whole of 2019, forecasting a marginal increase of around 1 percent. That is weaker than the ministry’s latest official projection provided in May, which had already been revised down to 3 percent from an 8-percent target set at the start of the year.

―― Last week, Jurin said the ministry would ramp up pending trade negotiations such as the long-delayed 16-member Regional Comprehensive Economic Partnership, and resume talks on the Thailand-European Union Free Trade Agreement, which has been stalled since the 2014 military coup.