While the global economy shows a continued recovery, Thai exports shrank by 6.71 YoY in October 2020 to USD19.37 billion, but minus related petroleum products, gold and munitions, exports fell by 4.89%, resulting in Thai exports shrinking by 7.26 percent YoY in the first 10 months.
Agricultural exports contracted again to 8.8%, particularly granulated sugar exports affected by the severe domestic drought, while the world sugar supply increased due to exports from Brazil. In addition, demand for certain agricultural products such as rice and canned seafood has declined after sufficient inventory.
Exports of most industrial products have improved, especially those related to working from home such as computers and components, air conditioners, and personal protective equipment (PPE) against viral transmission like rubber products. Nonetheless, overall exports of industrial products contracted by 4.7% due to the decline in exports of automobiles and parts, and of crude oil.
Thailand's exports to CLMV countries has further contracted due to the re-emergence of the COVID-19 pandemic, but exports to major markets are still mostly in a recovery trend, in line with the rise in the Purchasing Managers' Index. Exports to the US have continued to grow well for the fifth consecutive month, and several markets have begun to turn to recovery, along with exports to India being up by 13.7% for the first time in 15 months.
Going forward, Thai exports are set to encounter uncertainty from the potential global economic recovery, the strengthening Baht, from COVID-19 in the United States which is still serious, and from the political vacuum during the presidential transition period which may put the US economy at risk. In addition, it is still necessary to closely follow the second-wave outbreak of Covid-19 in many countries such as European countries, Japan and Hong Kong. Hence, KResearch maintains its projection of a 7% contraction in Thai exports in 2020.
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