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https://www.nationthailand.com/thailand/economy/40025052

Thailand’s ‘mini’ FTA with Hainan pays off in big way

MONDAY, FEBRUARY 20, 2023

The “mini” free trade agreement Thailand signed with China’s Hainan province two years ago helped push up exports to the area by 91.9% last year.

Commerce Minister Jurin Laksanawisit made this comment after meeting Hainan’s executive vice governor Shen Danyang on Monday.

“The Commerce Ministry has accepted China’s invitation to participate in the Hainan Expo from April 11 to 15,” he said.

Jurin reckons at least 20 Thai businesses will participate in the expo.

He added that Thailand will promote Hainan as a free trade port, and even set up an office there to publicise Thai products.

“Thailand has asked Hainan to further expand the mini FTA, increase the frequency of trade discussions and add Thai products to Hainan’s duty-free shops,” he said.

“The Commerce Ministry is also inviting Hainan to send businessmen to participate in Thailand’s five trade fairs, namely Style Bangkok, Thailand Autoparts and Accessories, Thaifex-Anuga Asia, Tilog Logistix and Bangkok Gems & Jewellery Fair.”

Jurin said China was still Thailand’s key export market, despite the global economic slowdown, the ongoing Russia-Ukraine war and inflation.

He said Thailand will sign mini FTAs with Shenzhen and Yunnan soon as part of its aim to boost exports to China by 1% this year.

The value of exports to Hainan last year came in at 18.2 billion baht, up 91.9% year on year. The most popular products exported were rubber, fruit, chemicals and ore.

Jurin said the mini FTA with Hainan was signed on August 20, 2021, which further strengthened the country’s ties with China.

He said Thailand currently has seven mini FTAs with key cities globally and expects negotiations on another six to be completed soon.

Related stories:

Thailand aiming to expand huge China market at Asean FTA meet

Thailand to finalise draft for FTA talks with EU this month

Thailand, EU set to relaunch free trade talks: commerce minister

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https://www.nationthailand.com/thailand/economy/40025050

Govt revenue soars past target in first four months of fiscal 2023

MONDAY, FEBRUARY 20, 2023

Government revenue collection for the first four months of fiscal 2023 (October to January) surpassed its target by 12.3%, the Finance Ministry’s Fiscal Policy Office (FPO) said on Monday.

FPO director-general Pornchai Thiraveja said revenue was 866.643 billion baht in the first four months, which was also 10% higher than for the same period last year.

Government agencies surpassing revenue targets this year are:

– The Revenue Department with 613.298 billion, or 11% above target, driven by higher corporate tax revenue due to the expanding economy.

– The Customs Department with 47.112 billion, or 32.7% above target, after receipt of excise taxes following rulings in smuggling cases.

– Other agencies, which have received revenue from their revolving funds and concession fees from mobile phone operators and auction of licenses for FM radio frequencies. Some state firms also remitted their income for fiscal 2022, adding to revenue in this group.

In contrast, the Excise Department’s revenue was 14.4% lower than its target of 160.415 billion after the government cut diesel excise tax to reduce the impact of rising prices on consumers.

Excluding the Customs Department and other government agencies, the government collected 57.928 billion in revenue during the first four months of fiscal 2023, 7.8% higher than targeted and 5.6% higher than the previous fiscal year.

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https://www.nationthailand.com/thailand/economy/40025014

Have 30 satang handy? You can buy YumYum Changnoi noodles then

SUNDAY, FEBRUARY 19, 2023

The government’s decision to allow a 30 satang increase in the price of “YumYum Changnoi” instant noodles is causing problems at checkout counters.

This is because the Thai currency only has 25 and 50 satang coins, and returning change for 3.30 baht is becoming difficult.

Wan Thai Foods, the manufacturer of YumYum Changnoi, had filed a request with the Department of Internal Trade last year to increase the price of the noodles from 3 baht to 4. However, it was told that it could only raise it by 30 satang to 3.30 baht.

“Manufacturers have never faced a problem like this before,” a source from the consumer goods industry said on Saturday.

Separately, a source from the retail industry said this is yet another evidence of this government’s inability to maintain product prices.

“Instant noodles have become a product used in political games,” the source said, adding that the price of instant noodles is a sensitive issue among Thais. Instant noodles are the cheapest source of nutrition in Thailand.

Pawat Ruangdejworachai, CEO of media solutions firm Media Intelligence Group, said product prices are calculated based on the cost of production, packaging, marketing and the manufacturer’s profit.

Many manufacturers have been suffering from rising costs due to skyrocketing oil prices due to the ongoing Russia-Ukraine war.

He said raising the price of YumYum Changnoi noodles by 30 satang was not in line with trade practices. Instead, he said, product prices should be set in a range that attracts consumers to purchase, like selling energy drinks at 10 baht per bottle.

“If brands want to increase their prices, they must ensure consumers get equivalent benefits, otherwise buyers will just go for a cheaper option,” he said.

The price of many consumer goods has risen over the past two months this year. For instance, the Red Bull energy drink has risen from 10 baht to 12, while 125ml packets of Lactasoy soy milk are now going for 6 baht instead of 5.

The price of YumYum instant noodles was raised from 6 baht per pack to 7 baht last year, along with Mama and WaiWai.

The price of Yakult yoghurt drink is set to rise by 1 baht per bottle on March 1, for the first time in more than a decade.

Related stories:

Instant noodles recalled in Singapore not imported to Thailand, says FDA

Mama index: Are instant noodles a guide to economic health?

Korean ramen next in line for sharp price hike

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https://www.nationthailand.com/thailand/economy/40024960

Consumer products likely to cost more despite cut in diesel price

THURSDAY, FEBRUARY 16, 2023

The move by the Oil Fuel Fund Office to approve a reduction in the retail price of diesel by 50 satang per litre from Wednesday is unlikely to deter consumer goods makers from hiking prices.

President of the Thai Wholesale and Retail Trade Association, Somchai Pornratanacharoen, said manufacturers were forced to hike product prices as skyrocketing energy costs had affected their overall cost of production.

“The high energy prices last year pushed up the prices of items, such as noodles, soaps, and snacks,” he said.

The prices of many products have risen this year, such as adult diapers, “Lactasoy” soy milk and “Leo” bottled beer, he said.

“Some stores in provinces around Thailand have increased the retail price by 5 baht per item,” he added.

Snack manufacturers are itching to increase their prices, but they are waiting for potato chip companies to take the lead.

The popular “Carabao” energy drink has raised its price due to higher packaging costs.

“High inflation and increased energy prices are factors affecting production cost, while the economic slowdown has hit consumer spending,” said Nattha Piyawirojsathien, director of strategic planning at Mindshare, a global media and marketing services company.

Consumers are demanding that the government, the private sector, and manufacturers maintain their product prices, she said.

There is still a necessity to purchase food even though the prices have gone up, hence consumers are moving towards house brands and buying in bulk, according to Nattha.

She added that other countries are facing similar issues, but in Canada and the US, for instance, the original selling prices were maintained during the festive season.

“Consumers may not be able to buy the same quantities as before, but these factors don’t stop them from spending, because the pandemic has already forced them on a budget, “said Nattha.

“Spending will now be smarter and more rewarding,” she added.

Related Stories: 

• Thailand hails RCEP bonanza as trade passes THB10 trillion in first year
• Prayut upbeat over ministry’s forecast of 4% GDP growth this year
• Thailand’s Consumer Confidence Index rebounds to pre-Covid level

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https://www.nationthailand.com/thailand/economy/40024923

FTI suspects speculation behind baht appreciation, urges close scrutiny by government

WEDNESDAY, FEBRUARY 15, 2023

Nongluck Ajanapanya

The Federation of Thai Industries (FTI) has urged the government and relevant agencies to closely monitor the baht amid concerns of foreign money entering the country and being used for speculation and inflating the value of the baht.

FTI vice chairman Suchart Chantaranakaracha issued the warning on Wednesday during the release of the Industry Sentiment Index report for January.

He said the baht had depreciated to its lowest point in October 2022 when it fell to 38.80 to the US dollar before gradually appreciating in January to 32 to 33 baht to the dollar without any significant drivers of growth.

He said there had been no indications of a positive outlook for Thailand’s economy over the previous four months.

He pointed out that tourism is yet to make a full recovery, as China has only recently opened its border. The US Federal Reserve is still raising interest rates while the country’s inflation rate is still high and electricity prices are rising.

Suchart said the baht’s steady appreciation against the dollar despite moderate growth forecasts for the country is a matter of concern, as it could indicate foreign capital is entering the country to speculate on the Thai currency.

He proposed holding the value of the baht at around 34 baht, a rate suitable for both importers and exporters, to ensure competitiveness.

Suchart Chantaranakaracha (left)

The appreciation of the baht is a major concern for Thai manufacturers in both the import and export sectors over the next three months, despite the fact that their confidence in Thailand’s economy has reached its highest level in 43 months, at 93.9 points.

Geopolitical tensions, a slowdown in the United States and Europe, the possibility of an interest rate hike and volatile oil prices could all harm Thailand’s industry sector, according to the survey.

However, the return of Chinese tourists after the country ended all Covid restrictions, would help Thailand’s tourism grow exponentially, also increasing domestic consumption demand.

The survey urged the government to adopt a positive attitude in order to strengthen Thailand’s competitiveness by lowering costs, particularly electricity prices.

Meanwhile, the FTI said it supports the government’s bid to forge bilateral free trade agreements with potential markets, such as Europe and the Middle East.

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https://www.nationthailand.com/thailand/economy/40024893

Cabinet nod for beginning of talks with European Union for FTA

TUESDAY, FEBRUARY 14, 2023

The Cabinet on Tuesday gave the green light for the start of negotiations on a free trade agreement (FTA) between Thailand and the European Union (EU).

Commerce Minister Jurin Laksanawisit said he would inform his EU counterpart and discuss work on creating an FTA with the 27-member group.

“Negotiations on the Thailand-EU FTA will begin once we receive permission,” he said.

He said Thailand currently has 14 FTAs with 18 countries. If the negotiations succeed, Thailand would have 15 FTAs with 45 countries, he added.

If we can make one to two more FTAs, we will gain an advantage over Vietnam in foreign trade and investment promotion, he said, adding that Thailand had waited for 10 years to have an FTA with the EU.

“We will kick off negotiations [on Thailand-EU FTA] within the first quarter this year,” he said.

He added that the EU currently has FTAs with two Asean countries–Vietnam and Singapore.

“If negotiations succeed, Thailand will be the third Asean country,” he said.

EU is Thailand’s fourth-largest trade partner, behind China, the US and Japan. Trade with the EU accounts for 7% of Thailand’s global trade.

Trade between Thailand and the EU last year was valued at US$41.03 billion (1.38 trillion baht), up 2.87% year on year, of which Thailand’s exports to EU were worth $22.79 billion (843.37 billion baht).

Thailand exports many products to EU, such as computer, cars, air conditioners, rubber products, gems and jewellery and processed chicken meat. Thailand’s imports from the EU included machinery, chemicals and medicines.

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https://www.nationthailand.com/thailand/economy/40024857

Thai aviation flying high as demand for flight slots, led by Chinese airlines, soars

MONDAY, FEBRUARY 13, 2023

Thailand’s aviation sector is buzzing with activity in February as airlines have requested 6,318 flight slots at Thai airports, the Civil Aviation Authority of Thailand (CAAT) said on Monday.

“The total number of flights in February this year now is 25,256,” CAAT director-general Suttipong Kongpool said.

He added that the number of flights in some weeks had increased to the level as before the Covid-19 pandemic in 2020, thanks to the government’s move to lift travel restrictions in July last year.

Suttipong added that 19 Chinese airlines have requested permission to operate flights to Thailand after China ended its travel restrictions on January 8 this year.

China’s Kunming Airlines has requested to operate flights at many Thai airports, while 9 Air and Xiamen Airlines have sought permission to operate both scheduled and non-scheduled flights, he said.

He added that Chengdu Airlines had requested to operate only non-scheduled flights.

“Air China will operate flights on the Beijing-Chiang Mai route every Tuesday, Thursday and Saturday from February 14 to March 25,” he said.

“Meanwhile, China Southern Airlines will operate flights every Monday, Wednesday, Friday and Sunday from March 1 to 24.”

He said Hainan Airlines had requested permission to operate flights on the Beijing-Suvarnabhumi Airport route every day from February 15 to March 25.

“The airline also has requested to operate flights on the Beijing-Phuket route every Wednesday and Friday, and the Guangzhou-Phuket route every Wednesday, Friday and Sunday from February 24 to March 24,” he said.

Suttipong said the CAAT had allocated 1,910 flight slots to Chinese airlines, including 269 in January, 671 in February and 970 in March.

As many as 500 flight slots at Suvarnabhumi Airport have been allocated to Chinese airlines, followed by Don Mueang (684), Phuket (476), Chiang Mai (197), Samui (27) and U-Tapao (26), he added.

Related stories:

Thailand’s four major international airports being expanded to cope with return of foreign tourists

Airports in Nepal that never took off

Massive flight cancellations leave hundreds of suitcases stranded at US airports

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https://www.nationthailand.com/thailand/economy/40024845

Thailand aiming to expand huge China market at Asean FTA meet

MONDAY, FEBRUARY 13, 2023

Thailand will seek to boost trade with the regional superpower when it hosts the Asean-China Free Trade Agreement Joint Committee (ACFTA-JC) in April, the Department of Trade Negotiations said on Sunday.

It will be the first meeting since the two sides agreed to upgrade the ACFTA at the 25th Asean-China Summit in November last year.

The ACFTA-JC hopes to finalise the framework of trade negotiations between Asean and China and other key details within 2024, the department said.

The framework will cover areas including the digital economy, green economy, supply chain connectivity, competition, consumer protection, and MSMEs (micro, small, and medium enterprises).

The department said China is now Asean’s largest trade partner, with trade volume in three quarters of 2022 expanding 9.68% year on year to US$530.32 billion. Asean’s exports to China amounted to $210.92 billion while its imports from China were worth $319.39 billion.

Meanwhile Thailand’s trade with China last year expanded by 1.53% year on year to US$105.40 or 3.55 trillion baht, with $34.38 billion (1.16 trillion baht) worth of exports and $71.01 billion (2.39 trillion baht) in imports.

Thailand’s key exports to China are fresh fruits, rubber, plastic beads, tapioca, computer components and chemicals. Its key imports from China are electrical machinery and components, electrical appliances, computers and components.

Related Stories

China’s reopening lifts Thai export sector but recovery is fragile: experts

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Thailand hails RCEP bonanza as trade passes THB10 trillion in first year

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https://www.nationthailand.com/thailand/economy/40024761

Thailand’s four major international airports being expanded to cope with return of foreign tourists

THURSDAY, FEBRUARY 09, 2023

The government is expanding at least four international airports to cope with the return of foreign tourists after the Covid pandemic, a senior government official said on Thursday.

Deputy government spokeswoman Traisulee Taisaranakul said efforts are being speeded up to expand major international airports after the Civil Aviation Authority of Thailand predicted that the number of foreign arrivals would reach the pre-Covid level in 2024.

The expansion of the airports are also aimed at coping with the prediction of the International Air Transport Association, the spokeswoman added. She quoted the IATA as predicting around 200 million foreign arrivals in 2031.

Traisulee said the four major airport expansion projects are:

● Suvarnabhumi International Airport Phase 2

Under the project, the construction of the Satellite Airport Terminal – 1 (SAT-1) has been completed and the Transport Ministry will start using the new terminal this year. The SAT-1 terminal will boost the airport’s capacity from 45 million passengers a year to 60 million a year.

Traisulee said the airport was also building its third runway, and the construction would be completed in 2024. After the third runway is completed, the airport will be able to receive 94 flights per hour from the current 68 flights per hour.

● Don Mueang International Airport Phase 3

The Cabinet on November 29 last year approved the Phase-3 development. Construction will start this year, and is due to be completed in 2029.

The Phase 3 project involves multiple constructions, including the third terminal, a runway, a new aircraft hangar and a warehouse building.

The airport will also build other basic facilities, including a new carpark building, a new office building, new roads, a new maintenance building, a garbage management zone, a new drainage system, and a fire station.

Traisulee said when the project is completed, the Don Mueang airport would be able to accommodate 40 million passengers a year, from the current 30 million.

● Expansion of the U-Tapao International Airport in Rayong

The expansion will be carried out in four phases and once completed in 2055, the airport will be able to receive 60 million passengers a year.

Traisulee said the first phase would be completed in 2024, after which the airport would be able to accommodate 15.9 million passengers a year.

● Phuket International Airport Phase 2

The project aims to expand passenger capacity from 12.5 million a year to 18 million. The project includes the expansion of the international terminal, and the expansion of aircraft hangars as well as expansion of basic infrastructure.

Traisulee said Airports of Thailand Plc, which runs the airports, is now selecting an advisory firm to set the details of the project.

As part of the preparations for increased international flights, the government has also drafted a new civil aviation master plan, which will be in use until 2037. Traisulee said the Cabinet approved the plan on Tuesday.

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https://www.nationthailand.com/thailand/economy/40024754

Thailand hails RCEP bonanza as trade passes THB10 trillion in first year

THURSDAY, FEBRUARY 09, 2023

The first year of the Regional Comprehensive Economic Partnership (RCEP) has boosted Thailand’s trade volume with member countries by 7.11% to over 10 trillion baht, the government said on Wednesday.

Effective since January 1 last year, RCEP comprises 15 countries: the 10 members of Asean (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) plus the five countries with which Asean has free trade agreements – Australia, China, Japan, South Korea, and New Zealand.

Thai exports to RCEP members in 2022 were worth 4.8 trillion baht, with major markets in Indonesia, Cambodia, Singapore and South Korea. Meanwhile, imports from RCEP members rose to 5.7 trillion baht, mostly from Brunei, Australia and Myanmar.

Export products that enjoyed the biggest benefit from the RCEP free trade zone were lubricant oil, canned tuna, tapioca chips, fresh durian, rice bran oil, and processed mackerel. Thailand’s biggest customer for these products was South Korea, followed by China and then Japan.

Thailand also imposed RCEP-related import privileges for synthetic textiles, plywood, engine components, ethylene polymer and fresh/dried grapes from China, South Korea and Japan.

Government spokesperson Anucha Burapachaisri said RCEP had led to impressive expansion of Thailand’s economy and strengthened the competitive edge of Thai products in global markets.

RCEP is the world’s largest trading bloc, covering over 30% of the global population.

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