11 July 2024

Thai exporters cannot continue to rely on the benefits they have been enjoying so far this year, to which a two-digit export growth has been attributed, but will have to make adjustments to meet new challenges next year, to stay competitive in the world market, said President of the Export-Import Bank of Thailand Rak Vorrakitpokatorn, at a seminar held today (Tuesday) by the Matichon newspaper.

He said that Thailand is fortunate in many respects, such as being located at the confluence of four rivers, a stable currency, an accelerating global economic recovery, increasing demand from abroad for Thai products and the hunger for more products in countries whose economies are recovering.

Dr. Rak added, however, that these benefits will disappear next year and new challenges will set in, citing the new shipping rates, which may increase by as much as 6-fold from this year and this will make Thai goods less competitive.

“Business is heading toward a new world, which could be called the “next normal”, rather than the “new normal”, said Dr. Rak, warning that businesses which are based on old structures will have only a slim chance of surviving without adjusting.

He cited the problem of shipping containers, which may become even scarcer, because full containers arriving at their destinations in developed countries, such as the US or Europe, and remain there empty, because those countries rely less on exports.

To mitigate the risk, he suggested Thai exporters explore new markets for their products, such as South Africa and Latin America, instead of the US and Western Europe.

Regarding Thai small and medium-sized enterprises (SMEs), Dr. Rak said there are about six million of them, including three million properly registered, but only 1% of them have managed to grow to become exporters.

“There may be something in the business model, which prevents the Thai SMEs advancing into the world market,” said Mr. Rak as he suggested the government devise a new business platforms to assist the SMEs.

As far as the Exim Bank is concerned, he said they have provided an online platform to help Thai SMEs adding, however, that the bank will educate the operators of the SMEs about risk management, for instance exchange risks, and SMEs must understand the behaviour of consumers abroad, their health and environment consciousness and their lifestyles.

The Bank of Thailand has projected export growth of 17.1% for the whole of 2021. The goods which have enjoyed steady export growth this year are automobiles, car tires and accessories, goods which are ever changing in according with advance technologies, such as electrical appliances, computers, electrical circuit boards and parts, pet feed, as more people are tending to spend more time at home, and commodities such as para rubber, tapioca, palm oil and minerals.