Exports in October 2010 may slow to USD17.133 billion, growing 15.7 percent, YoY, down from the growth of 21.2 percent in September. Meanwhile, exports, seasonally-adjusted, month-on-month (MoM), dropped by 1.8 percent after recording positive growth for two successive months. Excluding gold shipments, exports in October expanded 14.0 percent YoY, down from the 25.0-percent growth in September.
Uncertain global growth, coupled with the strengthening Baht, may stifle our exports in 2011. KResearch forecasts that exports in US Dollars may decelerate to only single-digit growth of 6-10 percent in 2011 from the expected overall 2010 growth of nearly 27 percent. Against a backdrop of a persistently stronger Baht, KResearch forecasts that exports in Baht may contract 1.5-5.0 percent in 2011, down from the 17 percent growth expected overall in 2010 due to the rising Baht of around 11-12 percent throughout the year.
On the policy front, the government may implement relief measures for exporters, especially SMEs, so that they can cope with impending challenges. Emphasis should be placed on expansion of export volume. To this end, exporters should be encouraged to penetrate into potentially lucrative new markets to take advantage of tariff privileges offered via FTAs. Of particular note would be Russia and their CIS, as well as Latin American markets that enjoyed over 70 percent growth over the first 10 months of this year. The Thailand-Peru Free Trade Agreement, which will come into force in early 2011, will offer good opportunities to Thai exporters to expand their markets in Latin America and North America.
In addition, exporters should be urged to add greater value to their products, or adjust their prices. Some focus should be placed on higher value products via improved production standards to keep up with new trade partner regulations, e.g., non-tariff measures in the form of CSR (corporate social responsibility) and good corporate governance to be implemented by the private sector. For small exporters with less resilience to the relentlessly strengthening Baht, the government may assist them with such relief packages as tariff measures, liquidity support and easier access to forex hedging instruments.
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