BANGKOK, Thailand – The Thai National Shippers’ Council (TNSC) has raised concerns over the recent appreciation of the Thai baht, which has surged by 12% in the past three months. The sharp rise is severely impacting the profitability of exporters, particularly those in the agricultural and agro-industrial sectors.
Chaicharn Jaroensook, Chairman of the TNSC, noted that the final four months of 2024 will be particularly challenging for exporters. The stronger baht is squeezing profit margins, potentially leading to losses. To manage these risks, some exporters are employing hedging measures and negotiating with trading partners to use local currencies for transactions. However, Chaicharn urged the Bank of Thailand to intervene and stabilize the currency to prevent it from appreciating too quickly.
The council has set a modest export growth target of 1-2% for 2024. To achieve a 1% growth, monthly export values need to average 22.7 billion US dollars. A 2% growth target would require monthly export values to increase to 23.4 billion dollars.
The TNSC identified several key risks, including the strengthening baht, geopolitical uncertainties in the Middle East, and potential fallout from U.S. safeguard measures on electric vehicles and other products expected by late September. Additionally, high logistics costs and ongoing natural disasters in Thailand’s northern regions may further burden agricultural exporters.
The council has called on the Bank of Thailand to take immediate action to prevent the baht from rising too rapidly. They also recommended providing financial tools and fee support for currency risk management, lowering the policy interest rate to a more suitable level, and reconsidering the planned minimum wage hike to alleviate pressure on businesses, particularly small and medium-sized enterprises (SMEs).
