1Q18 Shipments to Expand at least 10% on Surprising Growth in January Exports (Business Brief No.3728)

Ø Contrary to the past 5-6 years when the value of January exports tended to fall over-month, January shipments in 2018 posted better-than-expected growth to reach USD20.10 billion, increasing over the USD19.74 billion reported for December. The increase was attributable to the following:

- Shipments of several agricultural produce categories, namely rice, cassava products, and sugar, grew at a leapfrog pace.

- Key Thai exports, such as cars, auto accessories and parts continued to expand from 4Q17, thanks to steady economic growth in our trade partners.

- Electronics exports recorded a double-digit growth, buoyed by a cyclical upturn in the electronics industry.

Ø Looking into 1Q18, it is expected that Thailand’s outward trade will continue to thrive from the previous quarter, growing at least 10 percent YoY, supported by the following:

1. Continuing economic growth in our key trade partners.

2. Oil prices that are expected to stay higher than those reported during the same period of last year should help bolster petroleum-related exports.

3. Deliveries of rice under G2G rice deals during February-March 2018.

4. Prices of several agricultural produce, including rice and cassava, are projected to increase gradually.

Ø However, close attention must be paid to a number of factors during the remainder of 2018. These include a steady rise in the Baht’s value, the renewal of US GSP, the US trade barriers and non-tariff barriers erected by many countries, such as more stringent safety standards on imported food products. Rubber prices also warrant close monitoring because they may decline in 2018, thus affecting the value of Thai rubber exports overall. Given these factors, we at KResearch have to monitor the Thai export performance for a while; therefore, our 2018 growth forecast for the value of Thai shipments is being kept steady at 4.5 percent YoY.