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23 Mar 2017

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February Exports: (-)2.8% YoYAmid High Growth of Shipments to China (Business Brief No.3669 Full Ed.)

 Thai exports recorded negative performance at (-)2.8 percent YoY in February 2017. However, that figure would have been 8.5-percent growth, if goods that had experienced high price volatility last year were excludedfrom total exports – i.e., gold and merchandise in the aviation category (arms and ammunition) – our export value would have increased 8.5 percent YoY, also as a result of higher commodity prices.

Amid a contraction in overall exports, Thailand's outward shipments to China exhibited high growth – 31.1 percent higher YoY in February 2017 to USD2.28 billion. But this value remained lower that the level that it would have attained because some of these Thai products were exports sent to Vietnam via ‘cross-border trade', and then were later forwarded onward to China. This trade pattern is induced by VAT exemptions granted by China to Vietnam, for goods transported over the Vietnam-China frontier. Using that trade route, items in the food category can benefit from a 13-percent VAT exception, so our exports of fresh/chilled/frozen/dried fruit to Vietnam continues to flourish in response to demand in China.

Constant growth has generally been evident in our exports of food, auto parts, electrical appliances and printed circuit boards. This trend is expected to eventually shore up our overall exports in 2017 and may thus beat our preliminary forecast of 0.8 percent growth YoY.

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