Thai exports slipped for a second straight month in May, with the low value attributed to a slowdown in the global economy and low prices for farm products and oil.
The Commerce Ministry said yesterday that exports fell 4.4% year-on-year in May to US$17.6 billion, with imports edging up 0.5% last month to $16 billion.
Thailand had a trade surplus of $1.54 billion in May.
The ministry reported that exports of agricultural and agribusiness products shrank by 7.4% to $2.75 billion. The drop was led by rice (-24.2%), rubber (-9%) and sugar (-11.3%).
Exports of industrial products dropped 2.8% last month to $13.87 billion, mainly because of a fall in shipments of computers and parts, electrical appliances and plastic pellets.
But shipments of automobiles and parts rose by 4.6% year-on-year in May after falling 9.7% in April.
Somkiat Triratpan, director of the ministry's Trade Policy and Strategy Bureau, said shipments to most major markets declined, with China falling 12.7% in May, Japan down 8.6% and Europe 2.7% lower. Exports to the US rose 3.4% from a year earlier.
For the first five months, Thai shipments shrank 1.9% year-on-year to $86.9 billion, while imports totalled $76.5 billion, a fall of 10.3%. Thailand had a trade surplus of $10.4 billion for the period.
"The export performance was influenced by slowing global trade and high uncertainty," Mr Somkiat said. "This affected purchasing power and imports by Thailand's partners. In addition, the prices of farm products remain low while oil prices have continued to shrink."
Despite a 1.9% contraction over the first five months, Mr Somkiat said the ministry is maintaining its export growth target of 5% this year.
"If shipments average $19-20 billion a month for the remaining months, we could achieve 5% growth as expected," he said.
But Mr Somkiat acknowledged that shipments would be subject to contraction if exports continued to average just $17 billion a month.
Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, said recently that he thought exports would improve in the second half in line with higher oil and farm prices.
Exports are predicted to increase 2.6% in the second half, leading shipments for the whole year to bounce back to 0.8% growth after three straight years of declines.
Exports are projected to contract by 2% in the first half.
Mr Somkiat said Thai exports to Britain would be somewhat affected over the next couple of months by the country's withdrawal from the EU, as the departure was expected to drastically weaken the British pound, which would make Thai products more expensive.
He predicted a drop in purchase orders from Britain but said the impact on Thailand would not be severe, as shipments to Britain contribute only 1-2% of Thailand's total exports.
"More importantly, Britain is expected to take 2-3 years to pass through a lengthy exit process," Mr Somkiat said.
He said the key issue would be how other EU members handle Britain's exit and if any others choose to follow suit. Another factor is whether the euro will become weaker in line with the pound.