Saturday, January 12, 2008

Thai exports suffer on two fronts in US market


Many Thai exporters to the United States are beginning to feel the impact of a double blow from the baht's appreciation and the sub-prime mortgage crisis, which has hurt US demand.

A few months ago, when the mortgage crisis that began in the US first hit global financial markets, Thai exporters said they had seen no signs that the meltdown would affect their shipments.

But now Thai shrimp exporters are reporting slower growth in their biggest market, primarily because of the strong baht rather than the US credit problems.

Somsak Paneetatyasai, the president of the Thai Shrimp Association, estimated that Thai shrimp exports to the US in 2007 would rise by less than 5% in volume, compared to the double-digit growth that had been the norm. Values would likely shrink.

The Commerce Ministry said frozen shrimp shipments to the US dropped by 1.65% year-on-year to US$563.1 million in the first 11 months of last year.

''I don't think the decline was the result of the sub-prime crisis but rather the strong baht. Washington's requirement for bonds against shipments has also discouraged small and medium-sized exporters,'' said Mr Somsak.

The US has demanded the placement of continuous bonds (C-bonds) on shrimp exports from countries subject to its anti-dumping duties as a guarantee to cover the estimated penalties.

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