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23 May 2017

Thai Economy

April Export Value Up 8.5% on a Low Base and Rising Prices (Business Brief No.3681 Full Ed.)

Thailand continued to report high export growth in April due to a low 2016 base and rising product prices. The export value for April rose 8.5 percent YoY, but if the export value related to oil prices were excluded, it would have risen only 4.9 percent YoY.

Agricultural exports recorded high growth for the sixth consecutive month in April. Aside from rubber, our rice exports reverted to favorable growth with the help of measures taken by the Ministry of Commerce. In addition, sugar shipments also rebounded sharply, thanks to increased Indonesian purchases. Nevertheless, we at KResearch are of the view that the outlook for our sugar exports sent there is daunting because Indonesia has undertaken policies to protect their domestic sugar processors.

Meanwhile, Thai shipments to China slowed slightly in April, growing only 20.2 percent YoY amid sluggish economic conditions there. That performance was lower than what was reported for 3M17, given slowing growth in China's industrial output during April. It is expected that our exports to China over the remaining eight months of 2017 will gradually decline, bringing our full-year export performance to China to only around 5.5-8.5 percent growth YoY, sincecommodity prices are projected to soften over the rest of the year, and because it is believed that Chinese manufacturers will unlikely increase production as their concern towards US protectionism has begun to ease.

Thai shipments to the EU (28) reverted to contraction in April, on a short-term factor, i.e., Easter holidays had been pushed to April, resulting in fewer workdays that month. It is expected that our export performance to the EU will improve ahead, bringing our 2017 export growth to the EU to perhaps 3 percent YoY.

April export data shows that many key export categories declined, so close attention must be placed on them in the coming months. If they recover in volume, it is expected that the total 2017 export value will advance over our current projection of 2 percent growth YoY

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Thai Economy