Unexpectedly Strong Thai Exports Surge in September Despite Sluggish Global Demand
Published on: October 25, 2023.
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Thailand’s Rice Exporters Continue to Thrive Despite Global Weakness
In a surprising turn of events, Thailand’s exports have seen an unexpected increase for the second consecutive month in September. This growth is largely attributed to the rise in farm product shipments, despite a weak global demand. According to the commerce ministry, however, this growth is unlikely to be sustained for the full year.
Customs-based exports, which drive Thailand’s economy, saw a 2.1% rise in September compared to the same period last year. This surpasses the forecasted decline of 1.75% in a Reuters poll. Furthermore, exports saw a 4.9% increase from August 2023, marking the first increase in 11 months.
The increased exports can be attributed to higher shipments of agricultural and agro-industrial products. However, it’s important to note that the global manufacturing sector is still contracting, and the recovery of key markets remains uneven. The ministry released a statement acknowledging these challenges.
Although there is an expectation for exports to grow in the fourth quarter of 2023 due to large orders typically placed during this period, it is not enough to drive positive growth for the year. The commerce ministry’s permanent secretary, Keerati Rushchano, mentioned during a briefing that efforts will be made to minimize the decline in exports.
Previous forecasts indicated that exports would remain flat or experience a 1% decline this year. While the weak baht has been beneficial for exports, there is concern that geopolitical tensions could disrupt logistics. From January to September, exports have already declined by 3.8% compared to the previous year.
The Thai National Shippers’ Council has predicted a 1% decline in exports for the year. However, it’s worth noting that in September, exports of agricultural products saw an 18% increase year-on-year, while agro-industrial products rose by 5.4%. Additionally, rice export volumes spiked by 26.5% year-on-year, reaching 807,776 metric tonnes, and export value surged by 51.4%.
In terms of specific markets, exports to the US experienced a 10% decline, shipments to Southeast Asian countries dropped by 5.8%, exports to Japan were down by 5%, and shipments to China increased by 14.4%.
Despite the challenges posed by the global market, Thailand’s rice exporters have demonstrated resilience and continue to thrive. With increased volumes and export values, they remain a significant player in the rice industry.
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