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Thai garment exports down due to poor demand in EU, US, China

Due to volatile exchange rates, Thai garment manufacturers are struggling to find new markets in Asia and some countries in Europe, while focusing more on channeling trade in sportswear and uniforms through poorer neighboring countries that still have tariff privileges. The ‘Export Garment Fair’, a three-day event in Bangkok, saw Thai exporters sharing similar views. According to the President of the Thai Garment Manufacturers Association (TGMA), Thavorn Kanokvaleewong, China, countries in Europe outside the euro zone, and Asean markets could fit the bill, since they have high demand and relatively stable currencies. With rising cost of labour, China has to import more garments. Emerging ASEAN countries are also seeing increased demand for garments, and Thailand is one of major suppliers to those countries. Moreover, despite slowing business Japan’s policy of reducing imports from China will brighten Thai garment makers chances.

Thai garment exports this year could face a contraction of 2-5 per cent because of the sluggish global economy. Since Thai garment exporters had relied heavily on traditional markets, mainly the United States and the EU, a contraction was likely. Garment exports declined by 9.4 per cent year on year to $435.43 million. Export to the US declined 7.9 per cent, to the EU by 17.12 per cent, to Japan by 5.29 per cent, to China by 1.7 per cent, and to ASEAN by just 0.08 per cent.

TGMA figures show that the US was Thailand’s major garment export market, with a 35-per cent share, followed by the EU (21 per cent), Japan (15.4 per cent), China (5.4 per cent), and ASEAN (5 per cent). The US and EU shares have dropped continuously over the past five years, while those of China and ASEAN have gone up considerably.