Exports in July back on fast track
38% growth spurred by rubber and rice
After a hiccup in recent months, Thai exports regained strength in July, with a record monthly value and growth of 38.2% year-on-year, bringing the seven-month expansion to 25.7%.
Exports in US dollar terms were worth $21.52 billion in July, breaking the previous record of $21.07 billion in March. The July growth was the highest in 13 months and a huge improvement from growth of 16.83% in June and 17.58% in May.
Yanyong Phuangrach, the permanent secretary to the Commerce Ministry, said exports rose in all major sectors, especially farm products, with 53.5% expansion from a year earlier to $3.79 billion. The farm export growth was spurred by rubber (up 69.3%) and rice (110.6%).
Thailand exported $14.11 billion worth of industrial goods in July, up 37.9% year-on-year. The expansion reflected a sharp rise of 302% in exports of gems and jewellery, while gold exports surged 3.92 times to $995 million.
The steady revival in Japan's economy also helped push Thai exports in July. Growth in the Japanese market was 23% and Europe 35.5%, but the US market slowed down, expanding by only 8.1%.
Exports in the first seven months were worth $136.5 billion, up by 25.7% year-on-year.
Imports in July were worth $18.12 billion, up by 13.5% year-on-year, resulting in a trade surplus of $2.798 billion. The seven-month total was $130.25 billion, up by 26.1%, resulting in a surplus of $6.24 billion.
Mr Yanyong said the Commerce Ministry was maintaining its export growth target at 15% for this year despite foreseeable problems in some markets since exporters are seeking new ones.
"Although the new government has a policy of strengthening domestic trade and local consumption to reduce dependence on exports, exports will remain the major factor, generating income of more than $200 billion for the country this year," he said.
Sompop Manarungsan, president of the Panyapiwat Institute of Technology, said July exports rose impressively despite the global economic problems. The expansion was partly supported by growth in the Chinese market of 83.3%, compensating for the drop in the US.
Growth in the Chinese market was helped by Beijing's policy of spurring domestic consumption. New infrastructure also pushed up imports of rubber and other raw materials.
He pointed out a big surprise in the data was the 35% growth in the European market, which is still mired in debt problems and impacts from austerity measures.
He estimates exports this year will likely push GDP growth to 4-5%. Domestic consumption remains in good shape with 3-4% growth, as evidenced by the expansion of food, restaurant and retail businesses.
"The government should be careful with fiscal and monetary policy to ensure sustainability rather than growth," said Dr Sompop.
Nuntawan Sakuntanaga, director-general of the Export Promotion Department, said there were signs that exports in the second half would decline when compared with the first half.
As of Aug 24, Thailand had shipped 8.03 million tonnes of rice, up by 57% year-on-year, worth $4.55 billion, up 51%. The average free-on-board price was $567 a tonne, with Nigeria, Ivory Coast, Ghana, South Africa and South Korea the major markets.
