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https://www.nationthailand.com/thailand/economy/40022921

Thai exporters get ready for Europe’s control on carbon-emission imports

FRIDAY, DECEMBER 09, 2022

The Department of Trade Negotiations (DTN) has warned Thai exporters to brace for the impact of the European Union’s Carbon Border Adjustment Mechanism (CBAM), which should be finalised by December 15.

Under CBAM, a carbon tariff will be placed on carbon-intensive goods like cement and energy imported by EU countries. It is likely to take effect in 2026 with reporting starting next year.

A discussion between the European Commission, the European Parliament and the EU Council for the final phase of the measure is still pending, DTN director-general Auramon Supthaweethum said on Friday.

She said there were still some disagreements between the three parties, especially in terms of adding hydrogen, chemicals and plastics to CBAM products, the extension of the transition period and the revocation of free allowance for products costing less than 150 euros (about 5,500 baht).

However, she expects the differences to be ironed out and details finalised by December 15.

The transition to carbon-free imports is scheduled to begin on January 1, 2023, when importers will have to start submitting reports on carbon emissions “embedded” in their imports. These “embedded” emissions refer to the carbon emitted directly or indirectly during the production process.

“CBAM currently covers five products, namely cement, iron and steel, aluminium, fertilisers, and electricity,” Auramon said. “The list of products covered by CBAM will be expanded in coming years.”

However, she said, though details of CBAM are yet to be finalised, Thai exporters should follow its progress closely so they can adjust before the new regulations affect their exports.

She added that the ministries of Commerce and Natural Resources and Environment, along with the Thailand Greenhouse Gas Management Organisation, are working to help Thai businesses meet international standards.

Auramon said this is one of the key steps Thailand needs to take on its road to becoming a low-carbon society and economy.

Related Stories

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Bankers warn US, Europe economic slowdown may tame Thailand’s roaring exports

Thailand brings its carbon neutral, net zero dreams forward by several years

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https://www.nationthailand.com/thailand/economy/40022916

17,000 workers wanted on Phuket as tourism rebound sparks labour shortage

FRIDAY, DECEMBER 09, 2022

Phuket now has more than 17,000 job vacancies amid a serious labour shortage sparked by the post-Covid-19 tourism boom.

The holiday island is welcoming about 8,000 foreign tourists per day, Phuket governor Narong Woonciew told a press conference on Friday.

He said the number of tourists is expected to increase until the start of next year, swelled by a 41.34% rise in Thai visitors compared with 2019.

The Phuket Provincial Employment Office reported that 1,423 local businesses vacancies for 17,173 workers.

The office said the hotel business has the highest demand for workers, followed by service and retail businesses.

“Receptionists are in highest demand, followed by food and beverage service staff and spa masseurs,” the office said.

The labour shortage in the province is severe with only one worker for every five tourists, Phuket employment officer Pichit Singthongkham said.

The employment office has organised a press briefing to attract more workers from around the country. It will also hold a recruitment drive at Central Phuket on December 27, Pichit said.

Patong Hotel Association president Supattra Jaruariyanon urged the government to relieve Phuket’s labour shortage as quickly as possible.

“Hotel operators are handing employees overtime and hiring student interns on daily and monthly terms to tackle the issue,” she said.

The association is also urging Phuket recruitment agencies to take on local university students to work in the hotel sector.

Related stories:

• Thai employees likely to seek new jobs if their salaries remain unchanged: survey
• Job creation in first nine months exceeds pre-Covid level
• A new wave of ‘Great Resignation’ looms in 2023: Adecco research

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https://www.nationthailand.com/thailand/economy/40022908

Baht opens stronger against dollar on Friday but all eyes on US data

FRIDAY, DECEMBER 09, 2022

The baht opened at 34.70 to the US dollar on Friday, strengthening slightly from Thursday’s close of 34.79.

The currency will likely move between 34.60 and 34.80 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.

Poon said that the baht is likely to swing sideways, bounded by a range of 34.50 to 35.20 to the dollar.

A risk-on market may pressure the dollar to weaken or swing sideways, supporting strengthening of the baht.

However, any baht strengthening would be hampered as investors had not yet adjusted their holdings of risky assets, bonds and currency to take account of new US economic data.

Poon warned of possible baht volatility when the market reacts to the latest US producer price index, due today, and US inflation data.

If these numbers do not reflect market expectations of an economic slowdown, the dollar may strengthen and breach its resistance level of 105 points on US Dollar Index (DXY). This would trigger market concern that the US Federal Reserve could hike the interest rate, Poon said.

However, he doubted the baht would weaken much, projecting its key resistance level at 35.20, supported by foreign investors who are still buying Thai short-term and long-term bonds and concern about a slow economy.

He forecast exporters would wait until the baht dropped close to its resistance level before selling dollars.

He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

Related stories

• Thai business survey finds optimism about economy despite headwinds
• Finance Ministry brushes off protest over upcoming tax on stock trades
• TMBThanachart hikes loan interest rate but GHB maintains status quo

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https://www.nationthailand.com/thailand/economy/40022904

Thailand set to overtake Vietnam as world’s No 2 rice exporter

FRIDAY, DECEMBER 09, 2022

Thailand is on course to overtake Vietnam as the world’s second-biggest rice exporter this year, according to the Thai Rice Exporters Association (TREA).

India tops the list of rice exporters in the first 10 months with 17.06 tonnes million, while Thailand is second with 6.02 million tonnes, the TREA reported on Thursday.

Vietnam, which was the world’s No 2 exporter last year, was pushed into third with 6.01 million tonnes. Pakistan and the United States are in fourth and fifth places, with 3.4 and 1.9 million tonnes, respectively.

The list of biggest rice importers so far this year is led by Iraq with 1.3 million tonnes, followed by South Africa (0.64 million), the US (0.54 million), China (0.53 million), and Benin (0.3 million).

TREA added that in October, Thailand exported 0.79 million tonnes of rice worth 13.97 billion baht, up 24.7% and 20.5% from the previous month, respectively.

It projects exports in November of 0.8 million tonnes, rising higher in December due to demand during the Christmas and New Year holidays. TREA is confident that Thailand’s total rice exports this year will hit the target of 7.5 million tonnes, significantly higher than last year’s total of 6.12 million tonnes.

Thailand’s biggest rice markets are Iraq, South Africa, the US, China, Benin, Japan, Senegal and Angola.

Related Stories

Thai rice exports rise 33%, closer to 7.5-million-tonne target for 2022

Surge in rice exports puts Thailand on track to becoming 2nd largest global supplier

Thailand’s rice exports boom, Iraq emerges as largest customer

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https://www.nationthailand.com/thailand/economy/40022884

Thai business survey finds optimism about economy despite headwinds

FRIDAY, DECEMBER 09, 2022

Thailand’s economy will face several challenges in the first quarter next year, including inflationary pressure and the ongoing impact of the war in Ukraine, according to the latest survey of 200 leading executives by the Thai-Chinese Chamber of Commerce released on Thursday.

Despite headwinds, the survey of chamber members was generally optimistic: more than half of respondents forecast that the Thai economy’s performance will improve in the first quarter of next year.

Chamber president Narongsak Putthapornmongkol said respondents were most worried about inflation and the fallout from the war.

Narongsak said the survey, which was conducted from November 24 to December 1, aims to “predict the economic direction in the first quarter of next year”.

He said respondents were less worried about rising fuel prices because they believed they were likely to drop.

The survey also found concerns about household debt, non-performing loans, currency exchange volatility, and a decline in exports.

Still, respondents were optimistic about the return of foreign tourists and more foreign investment.

“Respondents believe that the return of foreign tourists, especially Chinese tourists, and the potential to draw foreign investors into ‘new industries’ will help Thailand’s economy recover quickly,” Narongsak said.

The survey found that foreign investors are most interested in Thailand’s electric vehicle, e-commerce, agriculture and foods, renewable energy and tourism industries.

Narongsak said the survey also found that rising consumer confidence and the government’s investment in utilities are seen as additional drivers of future growth.

Moreover, 57% of respondents expect Chinese companies to increase their investment in Thailand as they select the country as a production base for Asean.

Key responses to the survey include:

When asked if they were confident that the return of foreign tourists will help the Thai economy recover, most respondents expressed optimism:

24.3% very confident

58.6% moderately confident

When asked when inflation would stabalise, slightly more than 50% of respondents said in the first half of next year:

33.2% second quarter

23.7% third quarter

21% first quarter

When asked to forecast China’s economic health in the first quarter of next year compared to this year, the majority of respondents said it would either improve or remain the same:

37.6% better

32.6% remain the same

When asked about Thailand’s exports to China in the first quarter of next year, about half of respondents said they would rise:

50.3% increase

33.7% remain the same

When asked about Thailand’s imports from China in the first quarter next year, respondents said:

44.8% increase

32.6% remain the same

When asked about Thailand’s economic performance in the first quarter next year, more than half of respondents said it would improve:

55.3% better

31.5% remain the same

10.5% slow down

When asked about Thailand’s stock market in the first quarter next year, respondents were mixed:

37% rise

33.1% remain the same

27.1% drop

Related stories:

• Business bodies show the red flag to Pheu Thai’s minimum wage hike pledge
• Future business travel: From a frequent flyer’s viewpoint
• Lawyer targets TCC chief, ex-NBTC member over ‘leaks’ on Thailand’s True-Dtac merger

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https://www.nationthailand.com/thailand/economy/40022892

Industrial Estate Authority expects to sell/lease 2,500 rai next year as FDI rises

THURSDAY, DECEMBER 08, 2022

The Industrial Estate Authority of Thailand (IEAT) estimates it will sell or lease about 2,500 rai (400 hectares) of land to investors next year, its governor said on Thursday.

Wiris Amrapal said he expects the recovery of the global economy coupled with development of IEAT estates to draw more foreign direct investment (FDI) to Thailand, resulting in more sale/lease of estates.

Wiris said the IEAT fast-developing industrial estates had already drawn attention from foreign investors.

FDI is starting to rise again, with overseas companies seeking opportunities in the Eastern Economic Corridor since September 1 after Thailand began issuing long-term residency visas, he said.

The increasing number of foreign investors could be seen from the steep rise in leasing and sales on IEAT estates, Wiris said.

From September 2021 to October 2022, the IEAT sold or leased 2,016.14 rai on estates, up 65.1% from the same period a year earlier.

Wiris said major IEAT development projects making significant progress this year include:

– Third phase of the Map Ta Phut Industrial Port project, where construction is 30.33% complete.

– Smart Park Industrial Estate (1,384 rai), where construction is 38.65% complete for the September 2024 deadline.

– Special Economic Zone (SEZ) in Sa Kaew Industrial Estate (660.56 rai) in Aranyaprathet, where construction is 100% complete and six investors have moved in.

– Two industrial estates on Corrections Department land – one developed by Sivachai Co Ltd on 4,131 rai, and the other by Green Utility Holding.

– Project to cut greenhouse gas emissions, which now covers 31 factories.

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https://www.nationthailand.com/thailand/economy/40022891

Finance Ministry brushes off protest over upcoming tax on stock trades

THURSDAY, DECEMBER 08, 2022

The Finance Ministry is brushing off protesters who called on Thursday for an end to trading on the Stock Exchange of Thailand and warned authorities they would shift their money to foreign bourses due to the upcoming financial transaction tax.

If they want to trade on foreign bourses to avoid paying tax here, they will have to pay a tax there and it may be higher than here, said Kritsada Jinavijarana, the ministry’s permanent secretary.

Kritsada said that the Office of the Council of State was still ironing out some details of the new tax.

Kritsada also expressed optimism that the Thai economy would attain 5% annual growth due to the government’s efforts to restructure the agricultural and industrial sectors.

If there is more investment in Eastern Economic Corridor or the Eastern Seaboard Industrial Estate the economy will expand, he said.

“Economic growth could come from several drivers, including tourism. Although the current base number [of tourists] is low, if 40 million tourists came to Thailand in 2023, it will help the [economy] grow,” he said, adding that if that number of tourists arrive next year the economy could grow by 5%,” Kritsada explained.

He also said he agreed with the estimate from the Fiscal Policy Office that the Thai economy would grow 3.4% this year and 3.8% next year.

Thailand remains secure financially and should be able to remain so in the long term, he added, explaining that the current level of foreign exchange reserves is “great”.

Kritsada declined to provide an opinion on the Pheu Thai’s policy goal of nearly doubling the minimum wage to 600 baht a day in four years, saying the Fiscal Policy Office is currently considering what effects this increase would have.

Related stories

• Financial transaction tax is poorly timed, industry group warns
• Government gives the go-ahead for tax on share sales in stock exchange
• Budget Bureau, development council support financial transaction tax

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https://www.nationthailand.com/thailand/economy/40022887

High growth potential for Thailand’s halal food industry as exports to Islamic nations keep growing

THURSDAY, DECEMBER 08, 2022

Thailand’s halal food industry has a bright future with rising value of export to Muslim nations and the increasing number of Muslim tourists visiting the country, the Trade Policy and Strategy Office said on Thursday.

TPSO Poonpong Naiyanapakorn said Thailand exported halal foods worth US$4.681 billion to the 57 member nations of the Organisation of Islamic Cooperation (OIC) during the first nine months of this year. The value rose by 64.65% from the same period last year, Poonpong said.

In 2014, the value of halal food exports to the 57 OIC nations was US$4.188 billion, an increase of 4.12% from the previous year, Poonpong added. The value of halal food exports was 12.13% of the overall food export value.

The top five halal food categories exported to the 57 OIC nations in 2014 were:

– Cereals worth $1.063 billion

– Food mixtures (preparations) made from meat, fish, and marine sources $619.36 million

– Sugar and sweets $522.53 million

– Food mixtures (preparations) made from cereal, flour and milk $330.17 million

– Miscellaneous foods mixtures (preparations) $260.05 million

Poonpong said the top five OIC nations that imported halal foods from Thailand in 2014 were:

– Malaysia $1.193 billion

– Indonesia $885.77 million

– United Arab Emirates $228.64 million

– Egypt $225.18 million

– Yemen $165 million.

Apart from exports, Thailand could also earn a lot of income from selling halal foods to visiting Muslim tourists, Poonpong said.

He said the Global Muslim Travel Index (GMTI) 2022 made by the Mastercard-Crescent Rating reported that Thailand was ranked the third most popular destination for Muslim tourists after Singapore and Taiwan.

The ranking improved from fourth spot in the 2021 ratings, Poonpong added.

Before the Covid-19 pandemic, the statistics from the Tourism and Sports Ministry showed that of the 57 OIC nations, the highest number of travellers to Thailand came from Malaysia.

In 2019, 4.272 million Malaysian tourists visited Thailand and during the first 10 months of this year, 1.291 million tourists from the neighbouring country visited, followed by Indonesia and Saudi Arabia.

Poonpong added that the halal food industry has a bright future because of the large Muslim population worldwide and in Thailand.

He said statistics from the Pew Research Centre showed that world Muslim population was 1.9 billion, or 23.54% of world population.

Indonesia has the biggest Muslim population of 229 million, followed by Pakistan (200 million), India (195 million), Bangladesh (154 million) and Nigeria (99 million).

In Thailand, figures from the National Statistical Office of Thailand showed that there are 3.639 million Thai Muslims, or 5.4% of Thai population.

“Islam is the second most-practised religion in Thailand after Buddhism, so the Muslim consumer market is large with a lot of potential. Moreover, Muslims have a tendency to constantly spend [on halal foods],” Poonpong said.

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https://www.nationthailand.com/thailand/economy/40022873

TMBThanachart hikes loan interest rate but GHB maintains status quo

THURSDAY, DECEMBER 08, 2022

TMBThanachart Bank (TTB) on Thursday raised its lending rates following the central bank’s move to hike the key policy rate.

Piti Tantakasem, chief executive officer of TTB, said his bank had to raise the interest rate after the policy rate was increased for the third time this year.

On November 30, the Bank of Thailand’s Monetary Policy Committee voted unanimously to raise the policy interest rate by 25 basis points to 1.25% to control inflation.

Piti said TTB raised its MRR (minimum retail rate) for retail customers by 0.20 percentage point to 6.68% per annum while the MLR (minimum loan rate) for big clients was raised by 0.25 percentage point to 6.625% per annum.

He said the MOR (minimum overdraft rate) was raised by 0.25 percentage point to 6.65% per annum.

The increase takes immediate effect.

Meanwhile, Government Housing Bank president Chatchai Sirilai said the bank would maintain the current lending rates until the end of January before raising them in accordance with the new policy rate.

He said the GHB decided to maintain the current loan rates to minimise impact on its clients.

But the GHB has decided to increase its deposit rates for fixed accounts and deposit drafts with two-year, three-year, and five-year terms by 0.10 to 0.50 percentage point per annum from 1.1% per annum.

The increase will take effect on Friday, he said.

On Wednesday, Siam Commercial Bank (SCB) had raised its interest rates for both deposits and loans, the first bank to do so following the Bank of Thailand’s latest policy rate hike.

Related stories:

Bank of Thailand raises policy rate by 25 points to fight inflation

SCB first to raise interest rates after Bank of Thailand rate hike

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https://www.nationthailand.com/thailand/economy/40022863

Baht opens stronger against US dollar on Thursday

THURSDAY, DECEMBER 08, 2022

The baht opened at 34.88 to the US dollar on Thursday, strengthening from Wednesday’s close of 35.08.

The currency will likely move between 34.80 and 35.00 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.

Poon said that the baht strengthened quickly last night after the dollar weakened and the gold price increased.

However, he cautioned the baht could weaken, especially if the latest US producer price index slows less than expected and triggers market concern over another possible rate hike by the US Federal Reserve.

The market is also in a risk-off state amid the global economic slowdown, which may trigger foreign fund outflows from the Thai stock market, Poon said.

However, he viewed that the baht will not weaken much and projected its key resistance level at 35.20, supported by foreign investors who are still buying Thai short-term and long-term bonds.

He forecast exporters would wait until the baht dropped close to its resistance level before selling dollars.

He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

Related stories

• Thailand’s headline inflation edges downward for third successive month
• SCB first to raise interest rates after Bank of Thailand rate hike
• Inflation, supply chain constraints to squeeze Thai exports in Q4