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23 Mar 2020


Gold – Crude Oil: Major Factors affecting Thai Exports in Feb.2020 (Business Brief No.3856)


      ​Thai Exports in February 2020 remained a hodgepodge of temporary factors, being supported by consistent growth in gold exports but inhibited by a high base effect as a result of munitions rexports and crude oil prices in the preceding year. Meanwhile, the COVID-19 outbreak continued to affect Thai exports and imports in a limited scope as China was the the only country to announce a temporary lockdown of 18 cities to curb the spread of COVID-19 last month.

  • Thai exports in February 2020 had a value of USD 20.462 billion, having contracted by 4.5 percent, YoY which is lower than the market projection of a 7.4 percent contraction. The shrinkage was predominantly a ressult of temporary factors, including consistent growth in gold exports for two months in a row from growing demand for safe haven assets after the coronavirus spread beyond Chinese borders. However, once the value of gold exports is excluded, the value of Thai exports shrinks to 8.9 percent YoY.

  • The contraction of Thai exports in February 2020 was partially the result of a high base effect from shifted dates for the repatriation of US munitions that were imported during the annual COBRA GOLD joint military exercise. Moreover, the price of crude oil in February 2020, which was hovering at a much lower level than the same period of last year caused the value of oil-related shipments to see a massive drop.
    KResearch has readjusted the estimate on the expansion rate of Thai exports value for 2020, from the original estimated contraction of 1.0 percent to 5.6 percent as the global economy faces mounting risks from the prolonged presence of the COVID-19 outbreak, which has been building in intensity and scope with lockdown announced across many countries. These closures will most likely have a significant impact on global demand and supply. Additionally, crude oil prices which dipped to the level of USD 20 30 per barrel in March 2020 after a reduction in Saudi Arabia's crude oil prices and a fall in global oil demand caused by the COVID-19 outbreak are expected to culminate in a drop in the value of crude oil and related products.