Apr 1, 2013

Thailand - Thai growth, share in Asean low: study

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Kingdom fourth among countries in FDI during 2010-12

Thailand saw low trade growth and market share within the region during the Asean trade slowdown last year, while the country managed to capture fourth position for foreign direct investment among Asean countries, according to a study by the University of the Thai Chamber of Commerce.

Ath Phisanwanit, director of the International Trade Study Centre at the university, said that based on the study, Thailand saw comparatively low trade growth and market share in 2012. The Kingdom showed high growth and low market share in 2010 and 2011.

The study analysed trade capability of Asean countries in the three years from 2010 to 2012.

Growth of Thai exports to Asean countries was 4.9 per cent last year, compared with 20.7-per-cent growth in 2011.

Thailand came second in market share in Asean trade, growing 18.4 per cent for exports to Asean in 2012, compared with an 18-per-cent rise in the prior year.

Singapore ranked first with 43.4-per-cent export expansion, while the Philippines captured the highest growth in market share at 96.9 per cent.

Ath said that in three years of Asean trade, Thai rice became the falling star with a 10.41-per-cent drop in market share in 2012, while tapioca's export share dropped 0.04 per cent.

Thailand's share of the regional rubber market dropped by 2.91 per cent.

Thailand's automobiles and auto parts became the rising star in 2012 along with rubber products, vegetables and fruits, electronics and electrical appliances, sugar, meat, leather products, steel and steel products.

"There has been very high competition, particularly trade, in Asean, while the AEC target is to build up collaboration for innovation and raw materials among all. Thailand has to adjust itself to upgrade its position into the leading group," Ath said, referring to the Asean Economic Community that takes full effect in 2015.

Based on the study for three-year investment in Asean, Singapore captured the first position with US$167 billion (Bt4.9 trillion) in foreign direct investment, followed by Indonesia's $51.9 billion and Malaysia's $31.1 billion.

Thailand came fourth in FDI with $27.4 billion.

Ath said the baht appreciated by more than 5 per cent, while other Asean currencies strengthened by about 1 per cent, lowering export competitiveness.

Thai exports are expected to drop by 2.4 per cent for every 1-per-cent appreciation of the baht.

Despite the baht's appreciation, Thai exports could gain support from improvement of the global economy, particularly in the United States and Europe. Ath expects Thai exports to grow by 4-8 per cent this year. The baht is forecast to average in a range of 28-30 per US dollar in 2013.

Outside Asean, Apichart Jongskul, secretary-general of the Office of Agricultural Economics, said Chile had agreed to open its market to Thailand under a free-trade agreement. Tariffs on most products will be reduced to zero in the first year of the FTA.

Major exports of agricultural products to the South American country include canned tuna, canned pineapple, pineapple juice and tapioca starch. Chile agreed to open its market for rice especially, reducing the tariff to zero in the fifth year of the agreement.

The FTA between Thailand and Chile is expected to take effect in mid-2013.

Pranee Mueanpaengvaree

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