Thai Exports Falls for Second Month as Demand Wanes

By Suttinee Yuvejwattana

Jan. 21 (Bloomberg) -- Thailand’s exports contracted for a second consecutive month in December as slowing growth in the nation’s biggest markets eroded demand for agricultural products, electronics and automobiles.

Shipments fell 14.6 percent from a year earlier to $11.6 billion, Permanent Secretary for Commerce Siripol Yodmuangcharoen said in Bangkok today. Exports declined a revised 20.5 percent in November, the biggest slide in at least 17 years.

“Exporters are getting fewer orders and some of them are beginning to cut jobs,” said Pramon Sutivong, chairman of Thai Chamber of Commerce. “It will be a drag on the whole economy.”

The global economic slump is reducing demand for products shipped from Thailand by Toyota Motor Corp., Seagate Technology Inc. and Charoen Pokphand Foods Pcl. Southeast Asia’s second- largest economy may enter its first recession in a decade this quarter as exports slump and local consumption remains muted after months of political turmoil.

Toyota, Thailand’s biggest automaker, said Jan. 14 that its shipments to more than 100 countries will be affected by the global slowdown. Seagate, the world’s biggest maker of hard-disk drives, a day later said it’s cutting 6 percent of jobs worldwide, including in Thailand. Charoen Pokphand, the nation’s biggest meat producer, predicts slower sales growth this year as frozen chicken demand falls.

U.S., China

Exports to the U.S. declined 19 percent in December. Shipments to Europe dropped 16 percent, and exports to China contracted 40 percent, according to a ministry statement.

“We may face a contraction in exports during the first half,” Siripol said. “ We hope that we can be at least flat for the whole year.”

Shipments grew 15.6 percent in 2008, Siripol said.

Imports contracted for the first time since May 2002 in December, falling 6.5 percent after a 2 percent gain a month earlier and trimming 2008 import-growth to 27.6 percent.

The trade surplus in December was $350 million, from a $1.2 billion shortfall a month earlier. For the year, the shortfall was $812 million.

Thailand’s economy may grow 2 percent this year if a 300 billion-baht ($8.58 billion) government spending plan and tax cuts pay off, Finance Minister Korn Chatikavanij said Jan. 15. The pace would be the slowest in 11 years.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at Suttinee1@bloomberg.net