Thailand’s exports increased for the second consecutive month in August, the Ministry of Commerce reported on Wednesday, while maintaining its forecast of 1-2% growth for the year, despite the baht reaching a 30-month high against the US dollar.
With demand strengthening in key markets, additional export growth is anticipated this year, potentially exceeding initial predictions. However, the appreciating baht is expected to affect fourth-quarter shipments, according to Poonpong Naiyanapakorn, head of the ministry’s Trade Policy and Strategy Office.
In dollar terms, Thai exports rose 7% in August compared to the previous year, following a substantial 15.2% increase in July—the fastest growth in 28 months. Economists surveyed by Reuters had projected a 5.8% increase for August.
Imports to Thailand also saw a rise of 8.9% in August, surpassing the expected increase of 7.3%.
This resulted in a trade surplus of $260 million for August, contrasting with a predicted deficit of $70 million.
The value of exports to the United States increased by 3% in August year-on-year, while exports to China rose by 6.7%. However, exports to Japan experienced a decline of 11.3%.
Rice exports soared by 39.5% year-on-year, reaching 885,387 tonnes, and increased in value by 47% to $562 million.
During the first eight months of 2024, exports grew by 4.2% year-on-year, while imports rose by 5.2%, resulting in a cumulative trade deficit of $6.35 billion.
The baht has appreciated by 4.6% against the dollar this year, with double-digit gains in the past month, making it the second-strongest currency in the region after Malaysia’s ringgit.
“The stronger baht affects liquidity and profitability, particularly for agricultural products,” stated Chaichan Chareonsuk, chairman of the Thai National Shippers’ Council. “Some businesses may incur losses when negotiating new orders or might not receive orders at all,” he added.
The Ministry of Finance and the Bank of Thailand are scheduled to meet next week to address the currency appreciation and the country’s inflation goals.
The central bank announced on Wednesday that it is closely monitoring the currency situation and is prepared to mitigate volatility if necessary.
