A group of Thai shippers cut its export growth forecast in the second quarter to zero from 5% earlier, blaming the escalating conflict between Russia and Ukraine and global financial market volatility following Western sanctions imposed on Russia.
Chaichan Chareonsuk, chairman of the Thai National Shippers' Council (TNSC), said the Russia-Ukraine crisis and the Western sanctions would greatly impact the global and Thai economies, especially in terms of rising production costs from higher raw materials and energy prices.
Purchase orders from Thailand's key trading partners are expected to slow because of the crisis, he said.
Mr Chaichan said the TNSC projects Thai exports to grow 5% this year if the war does not escalate and a settlement can be reached within three months.
Exports are forecast to grow 7-8% in the first quarter as purchase orders have been confirmed in advance, he said.
If the conflict becomes prolonged, Thai exports may be hampered in the second quarter, said Mr Chaichan.
Purchase orders were forecast to decline by US$4-5 billion, particularly for vehicles and equipment, rubber products as well as electrical appliances (air conditioners).
The council forecast exports in the second quarter would be unchanged from $68 billion posted in the same period last year, which generated very high growth.
For the entire year, he said the council believes export growth of 5% is possible, but 7-8% is unlikely.
On Jan 11 this year, amid the ongoing Omicron outbreak, the TNSC kept its export growth forecast at 5-8% for 2022, driven by the recovery of trading partners and the baht's weakness.
The council expects outbound shipments to rise 6-7% year-on-year in January to about $21 billion.
In the first quarter of 2022, export growth is likely to reach 5%, said Mr Chaichan, assuming Thailand can effectively contain Omicron outbreaks during the period.
"We estimate the impact on Thailand's exports to Russia and Ukraine to be insignificant, as the export value to Russia represented only 0.3% of the total value last year at $1.02 billion. Export value to Ukraine totalled only $135 million last year, representing 0.05% of Thailand's total exports," he said.
"The important risk in the Ukraine crisis is a rise in oil and gas prices, as Russia is the world's second largest oil producer, accounting for 11% of global oil production. This will raise logistics and production costs, leading to shortages or price volatility for raw materials such as semiconductors, steel and grains."
Volatile foreign exchange, a labour shortage in the manufacturing sector and a rapid spread of the Omicron variant are also key areas of concern, said Mr Chaichan.
