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https://www.nationthailand.com/thailand/economy/40021498

China’s durian market threatens to become less juicy for Thai exporters

FRIDAY, OCTOBER 28, 2022

Thailand’s durian exporters should start making adjustments as fierce competition is bound to reduce their market share in China from 2025.

Krungthai Compass research centre warned on Friday that successful durian cultivation in China and competitors’ expansion will make Thailand’s market share drop from 95.9 per cent in 2021 to 90.4 per cent in 2025 and 88.1 per cent in 2030.

“Even though competitors’ market share is still lower than Thailand, it is likely to start surging,” the research house said.

The report pointed out that Malaysia’s market share has been expanding since 2016, as its Musang King variety is becoming increasingly popular. It said Chinese consumers are starting to develop a taste for this variety even though it is four times more expensive than Thai durian.

It added that China opening its durian market to Vietnam will also create a dent in Thailand’s market share.

“Competition will become intense when it comes to pricing,” Krungthai Compass warned.

However, it said China’s success in cultivating durian should not have a short-term impact on Thailand’s export because the harvests are not big enough.

It expects China to harvest 150 to 250 tonnes of the Musang King and Black Thorn varieties this month, accounting for only 0.3 per cent of Thailand’s durian export.

However, the report said, China’s productivity is expected to rise by up to 20 per cent annually between 2024 and 2030.

Krungthai Compass concluded its report by advising exporters to follow the D-U-R-I-A-N principles to boost their competitiveness. The principle is:

Develop: Apply smart agriculture, innovative packaging and product development to meet demand.

Unique: Promote and build awareness of Thai durian’s unique taste via online and offline channels.

Research: Research and develop new durian varieties that are of high quality and resistant to disease.

Improve: Improve the fruit to become a high-value product and promote sales through e-commerce platforms.

Assurance: Boost confidence among consumers throughout the durian supply chain.

New market: Expand exports to other potential markets such as Japan, Taiwan, South Korea and the US, to avoid reliance on China alone.

Related stories:

• Vietnam fast becoming Thailand’s competitor in China durian market
• Smell of success: PH durian soon exported to China
• ‘Musang King’ durian species not suited for M’sia forest farms: minister

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https://www.nationthailand.com/thailand/economy/40021478

Thailand on path to economic recovery as unemployment figures fall

FRIDAY, OCTOBER 28, 2022

The Thai economy is showing signs of improvement with the gross domestic product rising 2.4 per cent year on year in the first half of 2022.

The latest National Economic and Social Development Council (NESDC) report explained that the country’s GDP contracted heavily by -6.2 per cent in 2020 due to the pandemic and subsequent lockdown measures.

However, things began to improve in the second half of 2021, when most of the population was fully vaccinated and the global economy began picking up. This resulted in Thailand’s GDP expanding by 1.5 per cent in 2021, and the unemployment rate also dropping to 1.6 per cent in the last quarter of the year, compared to 1.9 per cent in the same period of 2020.

“The economy in the first half of 2022 maintained this improvement and saw an expansion of 2.3 per cent in the first quarter and 2.5 per cent in the second quarter, or an average of 2.4 per cent,” government spokesman Anucha Burapachaisri said on Friday citing NESDC’s report.

“The rate of unemployment at the end of the second quarter came in at 1.4 per cent, the lowest since the start of the Covid-19 pandemic, signifying a recovery in the labour market.”

Anucha said government stimulus measures, like the “Let’s Go Halves” co-payment scheme and “We Travel Together” tourism scheme, have helped stimulate the economy.

The government also issued two loan decrees for 1.5 trillion baht to cover Covid-19 vaccines and treatment as well as to compensate those affected by the lockdown measures. This, Anucha said, has helped people get back on their feet faster and contributed to economic recovery.

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https://www.nationthailand.com/thailand/economy/40021474

Thailand to get 2.3m foreign arrivals per month until March: Official Airlines Guide

FRIDAY, OCTOBER 28, 2022

Thailand can expect an average of 2.3 million foreign arrivals per month until March next year, according to the winter flight schedule posted by the Official Airlines Guide (OAG).

The OAG estimates Thailand will see 573,538 international visitors per week over the winter schedule (October 2022-March 2023).

It forecasts that most international passengers landing in Thailand this winter will be from Southeast Asia (211,744 passengers per week), followed by Northeast Asia (175,588 per week), South Asia (66,877 per week), Europe (56,354 per week), and the Middle East (44,990 per week).

OAG’s passenger estimate for the winter season is 74.2 per cent higher than figures for summer, which saw a weekly average of 329,288 arrivals, Tourism Authority of Thailand (TAT) governor Yuthasak Supasorn said on Thursday.

TAT also expects more visitors from distant markets to land in Thailand thanks to new routes, notably Air Austral’s Reunion Island-Bangkok service, which expects to carry around 280 passengers per flight twice a week.

Reunion Island is a French territory in the Indian Ocean with over 800,000 people comprising mainly high-worth seniors and families, said Yuthasak.

Meanwhile, Oman Air will increase its Paris-Muscat-Bangkok service to five flights per week from December 20. Air France will increase flights on its Paris-Bangkok route to five per week from November and then to seven per week from January.

Yuthasak said TAT is in talks with Air Belgium to open a Brussels-Bangkok route next summer. Thai Airways International scrapped its direct service from Belgium to Thailand last month.

Meanwhile, Airports of Thailand (AOT) estimates that traffic at its six international airports will return to 74 per cent of pre-Covid levels in fiscal year 2023 (October 2022-September 2023), with about 665,000 flights. An estimated 96 million passengers will use its Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, Hat Yai and Chiang Rai airports, or 68 per cent of the pre-Covid tally.

Santisuk Klongchaiya, chief executive officer at Thai AirAsia, said the carrier expects domestic flights this year to return to near pre-covid levels. The airline has witnessed increased bookings from international passengers in Asean countries, India, Japan and Bangladesh after travel restrictions were lifted and it opened routes to Fukuoka and Dhaka.

Thai AirAsia hopes to secure its highest turnover in three years by the end of 2022, said the CEO.

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https://www.nationthailand.com/thailand/economy/40021456

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

THURSDAY, OCTOBER 27, 2022

Economists from two leading banks warned on Thursday that the economic slowdown in the United States, the United Kingdom and the European Union may put a damper on Thailand’s hot exports.

The economists, from Kasikorn Research Centre and TTB Analytics Forecast Centre, were commenting on the country’s export performance in September, which beat expectations.

The Commerce Ministry had reported that September’s exports worth US$24.91 billion (941.4 billion baht) expanded by 7.8 per cent, growing for the 19th consecutive month.

The ministry said that during the first nine months of the year, exports valued at $221.3 billion grew by 10.6 per cent.

Kasikorn Research Centre managing director Chao Kengchon said export growth for September was earlier predicted at only 4-5 per cent, but a much higher growth was recorded.

Chao said the impressive performance was attributed to an easing in inadequate supplies of semiconductors, allowing manufacturers of motorcycles and vehicles to resume production for export.

The easing semiconductor shortage also allowed factories that make computer parts to resume manufacturing for export, he added.

Besides, the weakening baht had made Thai goods more competitive, Chao said.

He noted that September’s economic figures were good because both imports and the trade deficit slowed down to $25.7 billion and $853.2 million, respectively.

But he warned that the clear downtrend of economic growth in the US, the EU and the UK would affect Thailand’s exports in the last three months of the year.

With a slowdown in major economies, high inflation rates and possible interest rate rises posing a serious challenge, Thailand’s export growth might slow to 7-8 per cent this year or 2-3 per cent next year, Chao said.

However, Kasikorn Research Centre expects the trade deficit to slow down in the fourth quarter to end at $16.8 billion as global oil prices are likely to fall.

The centre also expects the current account deficit to drop during the remaining months of the year and it might even turn into a slight surplus next year because of a healthy tourism sector revival, with 10 million foreign arrivals likely this year and 20 million in 2023.

The centre has maintained its economic growth prediction at 2.8 per cent this year and 3 per cent next year, Chao added.

Meanwhile, TTB Analytics Forecast Centre chief Naris Sathapholdeja said that although September’s exports were higher than predictions, exports could slow down during the remaining months of 2022 due to a global economic slowdown.

TTB Analytics predicted that export growth this year would be about 5 per cent.

While Kasikorn saw a downtrend in imports, Naris warned that if imports did not slow down in line with exports, the current account deficit could widen and hurt the country’s economy.

Naris voiced concern that imports continued to expand by two digits, or 15 per cent, in September although it was lower than the predicted 20 per cent.

However, Naris said, the current account received a positive factor from the improving service account thanks to the increase in foreign arrivals.

He said TTB Analytics expected foreign arrivals to reach 10 million this year, which would help bring down the current account deficit to about 1.5 per cent of GDP.

If the number of foreign arrivals next year rises to 15 million, the current account will not see a deficit but reach a balance, Naris said.

However, if the number of foreign arrivals is higher than 15 million, the current account will enjoy a surplus in the second quarter and GDP would expand by 2.8 per cent next year, he added.

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https://www.nationthailand.com/thailand/economy/40021448

Thailand records deficit of over THB600 billion in 9 months

THURSDAY, OCTOBER 27, 2022

Thailand faced a deficit of more than 600 billion baht from January to September this year due to the impact of rising fuel prices on import costs, the Commerce Ministry reported on Thursday.

The kingdom saw a US$14.98 billion (624.78 billion baht) deficit as imports in the first nine months totalled $236.35 billion, up 20.7 per cent year on year, higher than exports worth $221.36 billion, a rise of 10.6 per cent year on year.

The country has recorded a trade deficit for five consecutive years since 2017.

“Even though Thailand had a trade deficit in the first nine months, the country witnessed export growth for 19 consecutive months,” the ministry said.

It expected exports during the remainder of the year to total $20.5 billion-$25 billion, a growth of 8 per cent.

Even though exports expanded, they are likely to slow due to global economic uncertainty and the risk of a recession in partner countries, the ministry said.

Exports to main and secondary markets expanded by 10.6 per cent and 2.9 per cent, respectively – the US (up 26.2%), Asean (up 9%) CLMV (Cambodia, Laos, Myanmar and Vietnam) (up 26.3%), and the European Union (up 18%), the ministry reported.

However, exports to other markets shrank by an overall 40.3 per cent, such as Switzerland (down 4.5%).

“The Commerce Ministry expects Thai exports to gain positive sentiment from an unravelling supply shortage and the weakening baht,” the ministry noted.

It vowed to closely monitor exports as these would be affected by an economic recession in overseas markets amid high inflation and a penchant for interest rate hikes.

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https://www.nationthailand.com/thailand/economy/40021443

NESDC counters World Bank, insists Thailand’s poverty situation has improved

THURSDAY, OCTOBER 27, 2022

The National Economic and Social Development Council (NESDC) on Thursday argued that Thailand’s poverty rate had improved contrary to a recent World Bank report.

NESDC secretary-general Danucha Pichayanan said Thailand’s poverty rate declined from 6.83 per cent in 2020 to 6.32 per cent in 2021 and the number of poor people fell from 4.7 million in 2020 to 4.4 million.

Danucha was responding to a World Bank report titled “Thailand Rural Income Diagnostic: Challenges and Opportunities for Rural Farmers”, which was issued on October 20.

The report stated that from 2015, Thailand’s progress in poverty reduction slowed down and poverty actually rose in 2016, 2018 and 2020 because of a slowing economy, stagnating farm and business incomes and the Covid-19 pandemic.

“In 2020, the poverty rate was over 3 percentage points higher in rural areas than in urban zones and the rural poor outnumbered urban poor by almost 2.3 million,” the report says.

“The majority of the poor (79 per cent) live in rural areas, mainly in agricultural households.”

Danucha explained that the Covid-19 crisis caused the Thai economy to severely contract at the rate of 6.2 per cent in 2020, causing the number of unemployed workers to rise to 650,000.

He said the unemployment rate in 2020 increased by 74.4 per cent from the previous year, while economic contraction caused the poverty rate in 2020 to rise to 6.83 per cent, compared to 6.26 per cent in 2019 when the number of the poor was 4.3 million.

The World Bank report also stated that the distribution of poverty was uneven across geographic regions, with the poverty rate in the South and Northeast almost double the national level.

“In 2019, the average monthly income of rural households was around 68 per cent of urban households,” the report went on to state.

“Rural households in the Northern region have the lowest average income.”

But Danucha said most unemployed workers, who returned home to their provinces during the Covid crisis, returned to work as farmers and the farming sector helped absorb the impact from the crisis.

He also noted that in 2020, the farming sector benefited from the rising prices of agricultural crops, allowing farmers to have increased income.

Meanwhile, the prices of farm products rose by 6.05 per cent in 2020, allowing farmers to have higher income at an average rate of 2.27 per cent, Danucha said.

According to him, per capita income between 2019 and 2020 showed that people in rural areas saw their income increase more than those living in urban areas.

In 2019, the average income for rural people was about 7,588 baht per head per month and rose to 8,130 baht, a 7.14 per cent increase, Danucha pointed out.

He said the average income of urban people was 11,712 baht per head per month in 2019, and this rose to 12,018 baht in 2021, a 2.61 per cent increase.

The poverty rate by region in 2021 showed that the South had the highest poverty rate of 11.6 per cent with 1.1 million poor people, followed by the Northeast (11.5%), North (6.84%), Central (3.24%) and Bangkok (0.49%).

The World Bank report also stated that with an income Gini coefficient of 43.3 per cent in 2019, Thailand had the highest income inequality level in East Asia.

Danucha said Thailand’s income Gini coefficient was on the downtrend but he admitted that the impact from the Covid crisis caused the rate to rise from 0.429 in 2020 to 0.430 in 2021.

He said after Thailand’s economy slowed to 2.2 per cent growth in 2019, compared to 4.2 per cent the previous year, the Thai government has been using several stimulus measures to revive the economy.

The measures helped the economy expand by 1.5 per cent in 2021, compared to a 6.2 per cent contraction in 2020, and the unemployment rate in the fourth quarter of 2021 fell to 1.6 per cent compared to 1.9 per cent in the same period of the previous year.

The driving force of the economic revival in 2021 helped the economy expand by 2.3 per cent in the first quarter of this year and 2.5 per cent in the second quarter, while the unemployment rate in the second quarter of this year dropped to 1.4 per cent, the lowest since the Covid pandemic, Danucha added.

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https://www.nationthailand.com/thailand/economy/40021430

Baht could continue strengthening to 37.50: market strategist

THURSDAY, OCTOBER 27, 2022

The baht opened at 37.65 to the US dollar on Thursday, strengthening from Wednesday’s close of 37.75.

The currency will likely move between 37.50 and 37.75 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.

He said market concerns that the US Federal Reserve might increase the interest rate at the end of the year have eased, which has led to a weakening of the dollar.

Meanwhile, the gold price is increasing and foreign investors have returned to purchase long-term bonds worth 6 billion baht for the first time in several weeks.

These factors have caused the baht to strengthen more than expected and exceed its support level of between 37.80 and 37.90 to the dollar, Poon said, adding that the baht might strengthen even more and head past its next support level of between 37.40 and 37.50 if these factors remain.

However, he warned investors to beware of market volatility as results of a key European Central Bank (ECB) meeting are announced.

Investors might sell the euro for profit and cause the currency to weaken if the ECB does not signal a rapid increase in the interest rate or shows concern for an intensified economic slowdown, even though the bank is expected to increase the rate by 0.75 per cent, he said.

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

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https://www.nationthailand.com/thailand/economy/40021413

Toyota leads the field as auto sales rev up in the first nine months of the year

WEDNESDAY, OCTOBER 26, 2022

The domestic automotive market has grown 19 per cent year on year in the first nine months of 2022 with total sales of 633,687 vehicles, in line with the continuous recovery of the economy from the impact of the Covid-19 pandemic.

The Automotive Industry Club of the Federation of Thai Industries (FTI) reported on Tuesday that 74,150 vehicles were sold in September alone, a 15.6 per cent jump from the previous month.

Toyota dominates Thailand’s auto market with 208,619 units sold in nine months, growing 25.3 per cent year on year.

Isuzu was second with 163,627 units sold, growing 24.4 per cent. Honda is in third place with 61,281 units sold this year, down 0.1 per cent year on year.

Notably, EV and hybrid manufacturer Great Wall Motor was in 10th place, enjoying a whopping 614.4 per cent growth year on year with 8,094 units sold.

Surasak Suthongwan, executive vice president of Toyota Motor Thailand, said that the surge in growth in the domestic auto market was due to manufacturers introducing new models while offering sales promotional campaigns, as the Covid-19 situation in Thailand is continually improving since the start of the fourth quarter.

FTI auto club vice president and spokesman Surapong Paisitpattanapong added that the easing of travel restrictions had boosted domestic travel, product transport, and influx of foreign investors, thus increasing the demand for vehicles among businesses and consumers.

“Furthermore, the manufacturing and import of automotive parts have met delivery targets this year, thus allowing the uninterrupted production of new vehicles in the market,” said Surapong.

The FTI would release its updated estimates on automotive output in 2022 at the end of October, he said.

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https://www.nationthailand.com/thailand/economy/40021408

Thailand’s exports in September grow 7.8 per cent but higher import bill widens trade deficit

WEDNESDAY, OCTOBER 26, 2022

Thailand’s exports expanded by 7.8 per cent year on year in September with a total value of US$24.919 billion, Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said on Wednesday.

Jurin said imports in September had a total value of $25.772 billion, an increase of 15.6 per cent, compared to the same month last year.

Jurin said Thailand had a trade deficit of $853.2 million in September.

During the first nine months of this year, Thailand’s exports were valued $221.366 billion, a 10.6 per cent increase compared to the same period last year.

Imports from January to September were valued at $236.351 billion, a 20.7 per cent increase year on year, Jurin said, adding that the deficit during the first nine months stood at $14.984 billion.

The minister added that there was still room for export growth for the rest of this year and that exports would drive the Thai economy to grow by 4 per cent as targeted this year.

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https://www.nationthailand.com/thailand/economy/40021407

Thailand could soon become world’s top pet food exporter: Jurin

WEDNESDAY, OCTOBER 26, 2022

Thailand aims to surpass Germany and United States as world leader in pet food exports after seeing an over 34 per cent growth year on year in the first nine months of 2022.

Commerce Minister Jurin Laksanawisit said on Wednesday that from January to September this year, pet food exports had reached 74.97 billion baht, increasing 34.4 per cent year on year and was on the rise for 37 consecutive months.

United States is the biggest market (21.5 billion baht) followed by Japan (8.41 billion baht) and Italy (4.82 billion baht). Dog and cat foods dominate total exports at 65.27 billion baht, while 9.7 billion baht are from foods for other animals.

“Currently Thailand is the world’s third largest pet food exporter behind Germany and the US. Our products target both middle and upper markets, especially in the functional food sector for owners of alternative pets,” he said. “Thai products meet international safety standards with a manufacturing process that ensures environmental sustainability, which help establish trust in quality among global pet owners.”

“With continued support from the government and close cooperation between the ministry and the Thai Pet Food Trade Association [TPFA], I am confident that soon Thailand will take the lead and become the world’s biggest pet food exporter,” said Jurin.

Jurin was speaking at the Pet Fair Southeast Asia 2022, which will be held until Friday (October 28) at Bangkok International Trade & Exhibition Centre in Bangna, Bangkok.

TPFA, who organised the fair for the first time in Thailand since its establishment in 2019, said over 150 companies from 35 countries will be opening product and service booths. It estimated more than 1.3 billion baht worth of business deals will be achieved at the fair among over 3,000 participants.

Jurin added that his ministry and the TPFA will seek cooperation from the Thai Chamber of Commerce and the Federation of Thai Industries in hosting the pet fair in the coming years on a larger scale, aiming to become an international event for pet lovers from around the world.