August exports shrank unexpectedly by 7.4 percent YoY, declining substantially from the contraction of 0.85 percent YoY reported for July. This plunge was due to a high 2013 base, plus sharp falls in gold exports by 92.9 percent YoY, crude oil and refined petroleum product shipments by 35.0 percent YoY and 16.1 percent YoY, respectively.
Other factors pressuring exports were declines in purchase orders from traditional export markets (the US, Eurozone and Japan) as well as from some potential markets (India and China), plus a slump in agricultural produce prices. However, some agricultural export categories, e.g., rice, cassava products and refined sugar, continued to perform well, as did certain industrial items, e.g., computers & parts and integrated circuits that began to recover.
Although KResearch expects the value of our monthly exports to gradually rise toward the yearend – thanks to the Christmas and New Year festive season and the rush to use EU GSP privileges – it will likely be very difficult for the Thai export sector to resume growth this year due to protracted sluggishness seen in our outward trade over 8M14 – contracting 1.36 percent YoY – as well as unclear signs toward economic recoveries seen in some key trade partners, plus supply constraints and the fact our production structure cannot keep pace with technological advancements.
Thus, we at KResearch expect that Thai exports will shrink perhaps 0.3 percent in 2014, representing a decline for the second consecutive year, versus the contraction of 0.2 percent recorded for 2013.