December exports rise but full-year figure still a decline

December exports rise but full-year figure still a decline

December exports rose by 1.9% year-on-year, but the growth was not large enough for the full-year performance to escape contraction.

Workers use forklifts to move industrial goods at Klong Toey port yesterday. Krit Promsaka na Sakolnakorn

The Commerce Ministry yesterday reported last month's export value amounted to US$18.8 billion, up by 1.9% year-on-year.

Full-year figures showed a decline of 0.41% to $228 billion, the second straight year for a drop after shipments fell by 0.3% in 2013.

December imports fell by 8.74% to $17.2 billion, leading Thailand to a trade surplus for the month of $1.58 billion.

For the full year, imports tumbled 8.97% to $228 billion resulting in a trade deficit of $379 million.

Nuntawan Sakuntanaga, director–general of the International Trade  Promotion Department, attributed last month's increase mainly to higher exports of farm and agribusiness goods as well as industrial products.

Shipments of farm and agribusiness products rose by 0.8% year-on-year to $3.15 billion, boosted mainly by rice, sugar, beverages, instant noodles, canned fruit, frozen and processed seafood and frozen chickens.

December rice shipments surged 67% year-on-year to 1.4 million tonnes, raising full-year rice exports to 11 million tonnes, up by 57.2% from 2013.

The Commerce Ministry said exports of industrial goods rose by 4.5% last month, fetching $12.1 billion, mainly cars and auto parts, machinery and parts, plastic pellets and related products, gems and jewellery excluding gold, and TV sets.

The performance in several major markets recovered last month, with exports to the US rising by 13.2% year-on-year to a two-year high thanks to that country's economic recovery and higher employment. Shipments to Japan increased by 5.9% and to the EU by 1.4%.

However, December exports to Asean markets and to China fell by 18.8% and 0.6% year-on-year, respectively.

Ms Nuntawan said the Commerce Ministry expected export growth of 4% this year. But risk factors including the fragile global economy, volatile foreign exchange and quantitative easing measures by foreign countries must be monitored very closely.

"The government may need to revise the full-year export growth forecast after monitoring the situation in the first quarter," she added.

Credit Suisse economist Santitarn Sathirathai said exports had finally shown some signs of recovery, led by rice (up by 67% last month), construction materials (22%) and electronics (9%).

Despite Thailand's customs-based exports declining 0.41% in 2014, the second consecutive year of contraction, the Switzerland-based company still expects some improvement in merchandise export growth to 3-4% this year, he said.

Credit Suisse also believes a lacklustre domestic economic recovery, lower-than-expected inflation and a robust currency supported by a strong current account surplus should provide the central bank's Monetary Policy Committee with room and a willingness to cut its policy rate by 25 basis points.

"Whether that will happen today [at the Wednesday meeting] is a tough call," Mr Santitarn said. "But we think the chance of such a move is higher than most people think, and if not now, then we'd expect the Bank of Thailand to cut it at its next meeting.

"Finally, recent moves by the European Central Bank also provide a window for Thailand to ease the rate soon, in our view."

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