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22 Oct 2020


Thai exports in Sep. 2020 shrink 3.9%, with contraction of 7.0% expected for full-year 2020 (Business Brief No.3892)


​ Thai exports in September 2020 stood at USD 19.6213 billion, or a contraction of 3.9 percent YoY, amid a rise in global demand compared to the previous month. Thai exports over the first nine months shrank 7.3 percent YoY, with the lone bright spot being export growth in electronic products and electrical appliances. Working from home is a factor that spurred an increase in demand for such products worldwide. Moreover, electronic parts were exported at a faster rate amid concern about the tensions between China and the United States over trade and technology. In addition, agricultural exports made a turnaround in growth, especially cassava-based products, fruits and vegetables. At the same time, food products such as canned tuna, chilled and frozen pork, beverages and pet food were able to maintain consistent growth. The products that suffered a decline in exports for September 2020 came from product groups like cars, machines, refined oil, rubber, rice and granulated sugar. Meanwhile, gold exports for September 2020 showed a regressive trend with a 9.2-percent contraction, following a massive expansion in the month before.

A closer look at the Thai export market reveals that exports to the US have continuously grown for four consecutive months; just as exports to China, South Korea, Australia and certain ASEAN countries like Vietnam and Malaysia bounced back to positive territory. Conversely, exports to Japan and the European Union have fallen significantly as global demand has otherwise seen a recovery partly due to pent-up demand.

Since Thai exports over the first nine months contracted by a smaller degree than previously expected, KResearch has revised its forecast for Thai exports in 2020, improving to a 7.0-percent contraction compared to the original projection of -12.0 percent. Exported goods that have performed well over the past months will tend to expand even more during 4Q20. Nonetheless, Thai exports in 4Q20 will still be exposed to risks that may emerge under the current world economic conditions. COVID-19 recurrences – particularly in Europe where the second wave of the outbreak has become more severe than the first wave – may diminish demand for Thai products. Meanwhile, political factors like the uncertainty surrounding the US presidential election and the unsettled matter of Brexit will likely lead to more volatility in exchange rates and heightened pressure on Thai exports, going forward. Likewise, the tensions between China and the US are expected to remain a detriment and will likely become a factor that continually weighs upon global trade. On a different note, gold prices will remain volatile amid numerous risks, and its exports will serve as an important variable for Thai exports in the near future.