Thailand accelerates opening new markets after 2023 export target shows signs of slowing down

Export target for 2023

Thai exports have begun to show a clear slowdown after the export target value in October and November 2022 was negative for 2 consecutive months, which has caused concern for many parties. The clear tendency for exports in 2023 to slow down has resulted in the need to find a response plan to support exports, which are the main variable in the recovery of the Thai economy.

Mr. Chaichan Charoensuk, President of the Thai National Shippers’ Council, revealed that the Thai National Shippers’ Council (TNSC) predicts that the overall trend of Thai export targets in 2023 will expand by 2-3%.

Based on the assessment of exports in 2022, exports in terms of volume did not increase significantly. Looking at the number of shipping containers in 2022, it is close to 2021. However, the prices of raw materials and oil have increased, and the impact of the baht depreciating more than the currencies of competitors in the foreign market.

In 2023, oil prices are estimated to be lower than 2022, at $75-85 per barrel, and the baht will be at 33-35 baht per dollar, possibly stronger than competitors’ currencies. Therefore, in 2023, prices will be pressured, which tends to decrease in line with oil and raw material prices.

Therefore, food products still have potential as a result of the food shortage because the war zone in Ukraine is still unable to cultivate and there is no prospect of peace negotiations.

For other industrial products, it varies according to each country’s economic situation, such as the automotive industry, where the chip shortage problem has begun to ease, which has had a positive effect on the production of automotive parts, electrical appliances, and electronic parts.

Factors affecting world trade in 2023 include:

1. The economic slowdown will cause global trade to grow at a lower-than-expected 2.6-2.7%.
   The impact of high inflation, which has led the central bank to tighten monetary policy, although the policy implementation has been reduced, it is expected to continue in 2023.
2. The baht has been volatile and has appreciated faster than that of its competitors, which could affect the price spread of exporters, which could disappear.
3. Higher costs for exporters, such as electricity costs (FT) and labor costs, which are higher than in other countries.
   Exporter
4. The problem of raw material shortages and price fluctuations, such as product and energy prices that remain high due to direct and indirect impacts from the ongoing Russia-Ukraine war.
5. The chip shortage situation began to ease in Q3 and Q4 of 2022.

However, the National Economic and Social Development Board (NESDB) sees that in 2023, export products will have both opportunities and products that require more effort.

Products with opportunities in 2023 include:

• Food products
• sugar
• gem
• decorations
• Automotive and components

Products that require more effort in 2023 include:

1. Rubber Due to China’s Zero Covid measures, many areas have been locked down, resulting in tires, which are rubber products, being affected by slower orders from the measures.
   This may continue until the first quarter of 2023.
2. Plastic pellets and chemicals, as they are raw materials mainly exported to China, have been affected by China’s Zero Covid measures and China’s Dual Circulation policy, which focuses on developing innovation and domestic production technology, reducing dependence on imports from abroad. Chinese businesses have set up large chemical factories in production areas, causing exports of goods and related products in the group to have to work harder or may have to look for new markets next year.
3. Textiles and garments began to slow down in the last quarter of 2022 and continued into early 2023.
   As a result, the economies of major trading partners such as the United States and the European Union have begun to slow down and have a high chance of contracting.
   The impact of high inflation rates is affecting consumer purchasing power.

Meanwhile, the product group still has an opportunity to expand exports, but it needs to put in effort and focus on secondary potential markets that are starting to expand and recover from COVID, such as the Middle East.

What needs to be done urgently is to penetrate new markets and maintain existing markets. We need to quickly open up markets in emerging countries.
All of South Asia, the Middle East, ASEAN, CLMV, especially the Middle East, such as Saudi Arabia, after the restoration of trade relations between each other

In addition, it is necessary to create product awareness, build deeper trade relations with new trading partners, customize products to be more relevant to destination countries, and push exports.

In summary, Thailand’s export target must be adjusted to ” 2 increases, 2 decreases “, which are adding new market channels , increasing financial liquidity, reducing product costs , and reducing inventory to prevent various risks and prepare for adjustment in the challenging year 2023,” said Mr. Chaichan Charoensuk.

Mr. Jurin Laksanawisit, Deputy Prime Minister and Minister of Commerce, said that the 2023 export plan aims to penetrate markets with potential and increase export volume from the normal measures that have been set in advance on a case-by-case basis, penetrating 3 large markets with potential, including:

• Middle East Market
• South Asian Market
• CLMV Market

The 3 major markets in 2022 are expected to have a combined export value of 1.7 trillion baht and in 2023 will increase to 2 trillion baht, consisting of:

1. Middle Eastern market, focusing on 3 major markets:

• Saudi Arabia
• United Arab Emirates
• Qatar

The main target products are food, automotive parts, air conditioners, and construction materials, etc.
The goal in 2023 is to increase export figures from these three countries by 20% from 8.9 billion dollars in 2022.
It is $10.3 billion in 2023.

2. South Asian market focuses on 3 important countries:

• India
• Bangladesh
• Nepal

The export target in 2023 in these 3 countries, the South Asian market, increased by 10%, increased from 2022 at 12 billion dollars, increased to 13.2 billion dollars in 2023, with a focus on important products such as chemicals, plastic pellets, automotives.
and automotive parts, etc.

3. CLMV market consists of

• Cambodia
• Laos
• Myanmar
• Vietnam

Target to increase exports by 10-15% from $28 billion in 2022 to $33.5 billion in 2023.
Key targets include construction materials, electrical appliances, plastic pellets, textiles, and clothing.

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Source of information: Bangkok Business

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