Abstract
Thai exports in April reached a four-month low, with a -7.6% year-on-year contraction. Excluding gold, exports worsened by -9.3% compared to -0.4% in March. Most key merchandise exports contracted, particularly agro-industrial products (-12.0% YoY), with animal fats, oil and seafood dragging growth. Principle manufacturing products also shrunk by -11.2%, with chemicals and plastic beads falling the most. However, exports of semiconductor devices and motor cars continued to grow. Exports of mining and fuel products tumbled by -13.7%, but agricultural products continued to see robust growth at 23.8%. Despite this, exports to key trading partners, such as the US, ASEAN 5, and Japan, contracted, while exports to China increased. Imports also declined by -7.3% YoY, resulting in a trade deficit of USD -1,471.7 million in April. Going forward, Thai merchandise exports may face challenges due to lower demand from China and increasing downside risks in the global economy.
Thai exports in April continued to weaken to a 4 months low.
The value of Thai exports in April 2023 was at USD 21,723.2 million, equivalent to a -7.6%YOY contraction. Such a drop also worsened from the -4.2%YOY decline in the prior month. Nevertheless, excluding gold (a product that does not reflect actual international trade conditions), exports worsened by -9.3%YOY compared to -0.4%YOY in March. In terms of the seasonally adjusted month-on-month growth, exports in April contracted by -4.1%MOM_sa, marking the first %MOM drop in 3 months and reflecting a clearer signal of weakening.
Exports of most key products contracted. While exports of agricultural products continued to see strong growth.
Exports of most key merchandise contracted in April, in which (1) Exports of agro-industrial products dropped for the first time in 3 months at -12.0%YOY. Exports of animal or vegetable fats and oil, animal feed, and canned and processed seafood continued to drag growth with a contraction of -34.3% -33.6%, and -17.1%, respectively. (2) Exports of principle manufacturing products shrank by -11.2%, declining from the previous month with a contraction of -5.9% following exports of chemicals product and plastic beads that fell by -30.4% and -24.3%, respectively. Furthermore, exports of steel, iron and products dropped by -27.1%. On the other hand, exports of semiconductor devices, transistors, and diodes improved for 10 consecutive months, with a growth of 107.8% in April. Similarly, exports of motor cars, parts and accessories grew by 3.4%. (3) Exports of mining and fuel products tumbled by -13.7% as exports of refined fuel shrank by -17.2% after slightly improving in March; and (4) Nevertheless, exports of agricultural products continued with robust growth at 23.8%. Such an expansion marked a 3 consecutive months growth driven by exports of fresh/ chilled/ frozen/ dried fruits that soared by 142.8%, surpassing the 94.5% expansion in the previous month. Notable support included the recovery of demand from China, a sizable market, and easing supply bottlenecks at distribution checkpoints that expedited product shipments. Other key drivers included exports of fresh/ chilled/ frozen chicken that expanded by 38.9%, slightly declining from 47.9% in the prior month, and exports of rice with 3.5% growth. Conversely, exports of tapioca (cassava) products shrank by -44.1%, the first drop in 3 months.
Considering by destination, exports to nearly all key markets returned to a sharp contraction in April.
Exports to nearly all key trading partner markets returned to a contraction, in which (1) Exports to the US fell by -9.6%YOY after expanding by 1.7% in the prior month. (2) Exports to ASEAN 5 and CLMV worsened to -17.6% and -17.0%, respectively. (3) Exports to the Middle East shrank by -16.5%, marking the first contraction in 15 months. (4) Exports to Japan also returned to a -8.1% decline after expanding by 10.2% in the prior month. (5) Exports to EU28 stabilized compared to the prior month, which saw a contraction of -5.3%; and (6) However, only exports to China saw strong growth at 23.0%. Such a growth was the first increase in 11 months, partly due to the low base. Meanwhile, exports to Hong Kong plummeted by -29.8% compared to -10% in March.
Thai trade returned to a deficit once again following a sharp decline in exports.
The value of imports in April stood at USD 23,195.0 million, declining by -7.3%YOY, continuing from the -7.1% contraction in the prior month. Excluding gold (a product that does not reflect actual international trade conditions), imports weakened by -7.3%, a slight drop from the prior month. From analysis, imports of raw materials and intermediate products (-10.8%YOY) and capital goods (-9.5%YOY) led the decline. Meanwhile, the value of exports saw a sharper contraction than imports. As such, the customs basis trade balance returned to a deficit of USD -1,471.7 million in April after registering a surplus of USD 2,718.8 million in the prior month.
Going forward, SCB EIC views that merchandise exports may face an inevitable impact from a lower-than-anticipated nudge from China and increasing downside risks in global economic conditions
Thai merchandise exports may experience more challenges than previously anticipated in the remaining months of 2023, in which (1) Support from China may soften faster than anticipated. In April, China’s imports from Thailand increased for the first time in 10 months, with growth at 8.2%YOY, thus, allowing Thai exports to China in April to return to satisfying growth, partly due to the low base….
