Thailand’s clothing exports may drop % due to political impact

The Bobae Export Service Center recently pointed out that the political chaos has affected the export of fashion clothing products by 20-30%.
The head of the center, Pakanchai, said that the anti-government demonstrations and the declaration of emergency laws in Bangkok resulted in a 20-30% decrease in customers from Europe and Vietnam, and a 50% decrease in customers from the Philippines. The products exported to Europe are fashionable clothing designed by Thais and produced in Thai community economic entities, such as Chiang Mai, Lampang and other places of origin. However, customers from Spain, France and South Africa continue to come to Thailand to purchase fashion clothing products.
This year, the center has set a target of exporting products worth 30 billion baht, but it is not sure whether it can be achieved. Although the economies of Europe and the United States have begun to improve, Thailand’s exports are still restricted by domestic political factors. The export value in 2013 was about 25 billion baht, which did not reach the target of 30 billion baht.
Starting from November 2013, workers in Thai processing factories do not have to work overtime. Some operators go to China and India to purchase products because these countries have complete industrial chains for fashion clothing processing and production, and labor prices are lower than in Thailand. Although Thailand It has the advantage of winning by design. This is the direction that Thailand’s fashion garment processing industry is striving to develop in order to increase added value. Due to production costs, it cannot compete with China and India.
At the same time, domestic sales are also in line with the 20-30% decrease in exports. The wholesale center’s annual sales are about 15 billion baht. Last year, affected by the slowdown in economic growth and political issues, sales dropped to 14 billion baht. In 2014, sales are expected to reach 15 billion baht, as the political situation is expected to be alleviated. The depreciation of the Thai baht also helps foreign customers buy more products. Currently, foreign customers are not coming to purchase because their country’s government has issued a travel safety alert in Thailand.
Nopaporn, president of the Thai Export Goods and Shipping Chamber of Commerce, said that the current overall export situation is still normal, but there are some products such as ready-made clothing. After communicating with the business owners, we learned that clothing and ready-made clothing are fashionable products and have seasonal style issues. The products need to be inspected when the season changes. Adjustment, but the situation is not optimistic at present. As order customers shift to Vietnam for processing and production, the order situation in the third and fourth quarters of this year and next year will tend to decrease. Exports in the first quarter of this year were orders confirmed last year. It is not clear whether orders will decrease in the second quarter, but the situation in the first quarter is not good. It is estimated that the export situation will be better in the second and third quarters. Automobile products will be exported more due to reduced domestic demand, and electronic products will increase exports again, although profits have decreased.
The current depreciation of the Thai baht is good for exports, but the outlook for the third and fourth quarters and next year is worrying. If the political situation is still unclear or conflicts occur, foreign customers will not place orders with Thai factories and investment will encounter problems, so the long-term situation is worrying. As for whether this year’s export growth target of 5% can be achieved, the association will need to re-evaluate based on the situation.