Thai exports remained in the positive territory for a second consecutive month in March, registering a 1.3 percent expansion YoY, after climbing 10.3 percent YoY in February. Such a performance led to the first turnaround in Thai outbound trade in five quarters, having posted 0.9 percent growth for 1Q16. Notable performers steering Thai exports away from contraction included gold and automobile shipments, which skyrocketed 234.8 percent YoY and 88.0 percent YoY, respectively, in 1Q16.
It is noteworthy that average export product prices have remained low over-year, thus hampering a rebound in shipment value, wherein the export price index fell 2.0 percent YoY for March 2016. This figure not only reflected a negative outlook that has dragged on for 37 months, but also wore down the March export volume that managed to grow 3.3 percent YoY.
Looking at prospects over the coming months, it must be admitted that, exclusive of gold, there were only a few export items that may have the potential to continue upward this year, e.g., passenger cars, which have performed well in Australia, some Mideast nations and within the AEC, while also getting better prices. Other hopefuls include rice, which should sell well owing to greater demand from China and the original ASEAN member countries, as well as machinery and parts within ASEAN. KResearch views that this is a promising sign, but too little to counterbalance the adverse effects sustained from low performance by other major items, particularly oil-related products, electronics and electrical appliances.
The ability of exports to resume growth in 1Q16 at 0.9 percent expansion YoY may seems enchanting since it would thus lessen the possibility of whole-year export falling into contraction for a fourth year running. However, we at KResearch have decided to keep our export projection unchanged at 0 percent (range of -2.0 to 2.0 percent), predicting that any revival in major export items will be limited for many months to come, given unfavorable factors like lower prices over-year, global economic sluggishness, plus our electronics industry's inability to upgrade production to meet changing global demand.