Thai export value in the first month of 4Q17 (October) continues to show bullish signs.
- Exports related to oil prices continued to rise, despite a high 2016 base. Shipments of rubber and related products, plastic pellets, chemical products and refined petroleum rose sharply by 34.1 percent YoY in October, driving total Thai exports for October 2017 to 13.1 percent growth YoY. Excluding those five items related to oil prices, Thai exports had surged 9.5 percent in October.
- Thai tapioca shipments to China enjoyed a rebound, rising 29.5 percent YoY, thanks to China's policy of increasing domestic consumption of biofuel to 12 million tons, p.a., by 2020 (from 3 million tons currently), which increases their demand for imported corn and tapioca for use in ethanol production.
- Export of automobiles, auto equipment and parts rose 25.9 percent YoY in October. In particular, shipments of pickup trucks, buses and heavy duty trucks to Oceania and EU countries (15) skyrocketed by 38.9 percent and 344.5 percent YoY, respectively, due in part to an ongoing recovery in trading partners' economies that is helping to boost their domestic investments and logistic sector.
Positive factors driving Thai exports during 10M17 to 9.7 percent growth YOY included:
1) A continuing recovery in the global economy and international trade has increased demand for Thai merchandise; 2) Crude oil prices sustaining in the range of USD50-USD60/barrel pushed commodity prices higher than last year; and, 3) A cyclical uptrend in electronic products has contributed to gains in our electronic exports. These factors should help continue Thai export growth momentum during the last two months of 2017 (November-December) to achieve average monthly value of over USD19.5 billion. We at KResearch have thus revised upward our projection for the full-year Thai export value to 9 percent growth YOY in 2017, beating our original forecast of 7 percent.