Thailand Posts Biggest Trade Deficit in Three Months
Thailand Posts Biggest Trade Deficit in Three Months
(Update2)
By Anuchit Nguyen
Aug. 21 (Bloomberg) -- Thailand posted its largest trade deficit in three months as record oil prices increased the nation's import bill.
The shortfall in July was $1.03 billion, Commerce Ministry permanent secretary Siripol Yodmuangcharoen told reporters in Bangkok today. That was the biggest since April and compared with a trade surplus of $628 million in June.
Thailand has promoted the use of energy from domestic sources such as ethanol, biodiesel and natural gas to cut fuel imports after crude oil climbed to an all-time high of $147.27 a barrel last month. Price subsidies for some fuels including liquefied petroleum gas also increased local demand and boosted the import bill, the commerce ministry said.
``Imports of fuels and other energy have been the biggest concern because of their high prices,'' said Siripol. ``Overseas purchases of LPG have had a significant jump in the past few months because of its low costs.''
Imports rose 55 percent to a record $18 billion last month, accelerating from a 31 percent gain in June. Crude oil and fuel purchases advanced 98 percent, compared with a 66 percent increase the previous month.
LPG imports last month were worth about $200 million from none a year earlier, said Siripol. The import bill in July was also boosted by the overseas purchase of oil rigs worth $200 million, he said.
LPG Imports
Southeast Asia's second-biggest economy in April imported LPG for the first time on rising consumption from car drivers.
Imports of LPG may rise five-fold in 2009 to 1 million metric tons from 200,000 tons this year, Prasert Bunsumpun, president of state-controlled PTT Pcl, said in June. The controlled price of LPG, which is capped at about a third of the market level, has boosted demand, especially in the automobile sector, said Prasert.
Exports, which account for 70 percent of the economy, gained 43.9 percent from a year earlier to $17 billion, the fastest growth since at least 1992. They advanced 27 percent the previous month, buoyed by shipments of rice, rubber and tapioca.
Thailand, the world's biggest exporter of rice and rubber, is also facing pressure on its exports from slowing demand from its main overseas markets and falling prices of commodities, said Siripol.
The trade balance will deteriorate further in the second half ``as slowing growth in Europe and Japan reduces demand for our products,'' said Charl Kengchon, an economist at Kasikorn Research Co., a unit of Kasikornbank Pcl. ``Declining prices of rice and other commodities will also cut export growth.''
Benchmark export prices for 100 percent grade B white rice from Thailand fell 26 percent from a record $1,038 a metric ton on May 21. Rubber futures have dropped about 16 percent from the 28-year high reached on June 30.
bloomberg.com
