Thai exports exhibited a 7.1 percent YoY contraction in September 2013 due partly to a high September 2012 base, driven by hefty export value of gold and refined petroleum products. The decline was also attributable to concern toward signs of slowing economic recoveries in major trade partners. If gold exports were excluded, September shipments would have shrunk only 0.6 percent YoY.
We at KResearch expect that Thailand's outward trade may resume growth in 4Q13 since the value of many major export categories should gradually increase with improving economic conditions in key trade partners, along with strong demand from some other potential export destinations and new purchase orders ahead of the yearend holiday season. In addition, a relatively low 2012 base will likely help sustain 4Q13 export growth. As a result, 2013 export performance may lean toward our base case projection of 1.5 percent.
Although many export categories would benefit from such positive developments, some export items, e.g., agriculture and agro-processing, would not benefit much because existing problems seen in such exports have yet been unresolved. As a result, exporters will have to consider making adjustments to sustain long-term competitiveness, including changes from low value-added production to products with greater added value and have strong demand abroad.
In addition, they should utilize advanced manufacturing technologies to control product quality and employ effective cost management since these tactics allow greater flexibility for Thai exports to cope with rapid changes in the international trade environment.
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