Thunderstorm : thai exports crashed in november (historic drop of -18,6 % !)

It was a certainty. I wrote it (here and there). The only questions were the scale. And the timing. It has begun.

Thailand’s exports fell 18.6 percent from a year earlier to $11.87 billion in November, the first drop in five years, after a 5.2 percent rise in October, a Commerce Ministry official said on Monday. (Forbes)

The last negative value… was in march 2002. So it’s more than 5 years…

Furthermore, such a drop is historic. I’ve looked back at 1997… The previous largest drop was -15 %, recorded in december 2001.

The guys at the ministry are probably too shy to tell the truth. Look at the chart (source BOT) !

exportdrop

They can try to cover their arse, by saying that “the closure of Bangkok’s two main airports for five days in late November cost $1.3 billion in lost exports.“, that’s not the point and it should not blind us.

The party is over : trade is crashing in the world. The crisis is acute.

This morning, Japan released also some very bad figures for exports in november (a plunge of 26,7 % !).

Meanwhile, imports continued to rose… Consequence : the trade deficit explodes.

Imports rose 2.0 percent from a year earlier to $13.07 billion in November following a 21.7 percent rise to $15.82 billion in October.

– The November trade account showed a $1.2 billion deficit after a $558 million deficit in October.

Two weeks ago, the clowns of the Commerce Ministry were talking about cutting the export-growth target for 2009 to +5 %… Instead, they are going to have a freaking negative growth.

Two months ago, the BOT was talking about an export growth of +7 to 10 % for 2009… Fools.

Now the forecast for the coming months is very easy : we are going to see horrible declines in percentage (year on year). Because of the base effect.

And fundamentally, the situation won’t improve on the short term (on the contrary, the crisis is deepening).

So now the BOT and the government are on the front line.

They have only one solution to ease the pressure : to let the THB going down versus the dollar (read this article).

Fasten your seatbelts.

[the BOT will publish the details on december 31. I will update all my exports/imports and trade balance related charts beginning of january]

17 Responses to “Thunderstorm : thai exports crashed in november (historic drop of -18,6 % !)”


  1. 1 chinesethai 22 December 2008 at 12:26 pm

    Expect the numbers to get even worse for Dec. Today I visited one of my inactive customers, who I called and received no responses recently, only to find that the entrance was locked with chain lock around the door knobs. The owner bought the unit in this home office complex during the boom years. Luckily in my industry, transactions are usually done in cash.

    Letting the Baht depreciate would only neutralize the impact to small extent.

  2. 2 FDL 22 December 2008 at 1:36 pm

    Two days ago there was big fire that gutted a textile plant at Samut Prakarn. Accident or convenient?

    Obama had publicly announced that his economic package was designed ‘to save 3 million American jobs’ over the next 2-3 years.

    Thailand needs to come to terms with the reality of a really punishing global slowdown over the next 2 or more years. Abhisit V. should come out with a coherent economic policy that addresses this issue of global economic slowdown and its serious repercussions to Thailand, and, how the Abhisit Government would ‘soften’ the effects to Thailand’s working man.

    How many Thai jobs will be lost over the next 2-3 years to the global recession if NOTHING IS DONE? How many jobs will be lost (there will lots of jobs still lost that is for certain) if the Abhisit Government DOES SOMETHING (what is that something?)?

    The Abhisit Government will have to clean quickly to PRIORITIZE, PRIORITIZE and PRIORITIZE!

  3. 3 FDL 22 December 2008 at 1:38 pm

    i meant: The Abhisit Government will have to learn (NOT clean) quickly to PRIORITIZE, PRIORITIZE and PRIORITIZE!

  4. 4 FDL 22 December 2008 at 1:54 pm

    TC says: “There is only one solution to ease the pressure : to let the THB going down versus the dollar.”

    Problem is every country in the world is saying exactly the same mantra TC! And it gets horrifyingly worse. Because now the world will experience SHRINKING MARKETS everywhere. US market shrinks, Japan market shrinks, China/Asean markets shrinks, Russia market shrinks . . . every freaking market are shrinking ALL AT THE SAME TIME!

    Result: There is a threat of trade war and more trade protectionism.

    Thailand will WANT to expand its domestic market (to counter shrinking exports) but Thailand would restrict foreigners from accessing its domestic market by piling on protectionist measures, tariffs, anything!

    My prediction: The world will split into trading blocs in response to the crisis. More likely there will be a Japan-China-Asean bloc and I won’t be surprised if the foreign ministries of these countries specially Japan/China have already started making moves towards this direction.

    The Threat: Shrinking markets is a threat to world peace. World War II happened because Japan-Axis bloc wanted to lock-in on raw material source and markets.

  5. 5 ThaiCrisis 22 December 2008 at 2:51 pm

    Watch out : when I speak about the depreciation of THB as the only solution, it doesn’t mean I approve it.
    😉

    But you’re right : the trade war is inevitable. And one of the weapon (of choice) of a trade war is of course the currency…

    The BOJ has started to intervene to curb the appreciation of the Yen. China has reduced its interest rates again today (fifth time in 4 months). And china will use also the exchange rate of the RMB.

  6. 6 antipadshist 22 December 2008 at 10:36 pm

    that’s why ASEAN summit is urged to be sped up, not postponed.

    I suspect that Korn is still an agent of JPMorgan ! 😀

    perhaps the whole affair with PAD and as one of results of it – canceling of ASEAN meeting (and signing whatever documents by Thailand – which apparently others has already signed) in Dec was well planned? like to postpone whatever decisions till … March (as it was announced previously).

    ASEAN FTA can be seen as an example of move which FDL mentions: forming the bloc. recently there was also news report about Thai FTA with India.

    meanwhile there is a talk that government will ease taxes for corporations by 5% (from 30% to 25%). so, naturally “first things first”: it is not the concern about those Thais who will lose jobs, but about big corporations. well, of course Thailand is not anything unique in that…

  7. 7 ThaiCrisis 22 December 2008 at 10:43 pm

    Hum… Do you really believe that ASEAN (who ?) is the right place to take… decisions ? And important decisions ?
    😉
    I don’t.

    The UN is powerless. ASEAN is even worse.

    It’s a nice club of gentlemen drinking tea…

    As for the corporate tax cut… well that could be a good idea. It’s important to remember that companies listed on the SET… have already 25 %. It’s unfair. And this helps very large companies. I think the gvt should cut the taxes for SMEs, until a certain level of turnover and/or profits.

  8. 8 FDL 23 December 2008 at 2:18 am

    I am beginning to get this dread that perhaps the leaders of the world do NOT have a clue at all how to address and solve the current economic/financial crisis rapidly deteriorating before our eyes.

    The depression of 1930s, deeply researched and studied by current Federal Reserve Chairman Bernanke, it is believed could have been prevented if the Federal Reserve did NOT tighten monetarily at that time. The current crisis it is believed parallels the 1930s and Bernanke/Paulson eased the money/liquidity spigots to wide open to prevent another depression. All the other central bankers of the world had followed the American lead and the result is a deluge of fiat money and megatons of liquidity that so far had not made any perceptible impact on the economic slowdown and the financial crises. So open the money/liquidity spigots even more! They still talk of the DEFLATION threat . . but they also worry of the HYPER-INFLATION threat that looms as surely as the sun will rise tomorrow.

    People have the right to scream at the their leaders to ask: “DO YOU REALLY HAVE A HANDLE ON THE CRISIS? DO YOU KNOW WHAT YOU ARE ALL DOING? CAN YOU GIVE US MORE THAN A 50-50 ASSURANCE THAT YOU ARE NOT MAKING THINGS WORSE BY ALL YOUR ACTIONS?”

    I am a SAVER and I have saved a lot for my retirement. And specially in Asia, there are more savers than inveterate spenders. And our savings are deliberately being eviscerated by the runaway money printing machines of central bankers of the world. And what for?

    It is injustice to millions of savers like me. The central bankers of the world are trying to save financial deadbeats and wasteful spenders by trying to lend them even more money to buy more cars/LCDs they can’t afford, or, provoke an inflationary run that would revive home prices so those mortgage defaults would not appear, in the banks bookkeeping, to NOT be underwater! (This is ridiculous central bankers simulating window-dressing for the imprudent bankers/financiers)

    This is lunacy!

  9. 9 chinesethai 23 December 2008 at 2:19 am

    ThaiCrisis:

    “It’s a nice club of gentlemen drinking tea…

    You’re right. There is nothing to worry about ASEAN as the group has become magic hens that lay golden eggs for Japan, Korea, and recently China. It is not the ASEAN population but companies from Japan, Korea, and China, plus Europe and North America, who benefit from AFTA.

    So who cares about ASEAN meeting?

  10. 10 chinesethai 23 December 2008 at 3:14 am

    FDL,

    The Threat: Shrinking markets is a threat to world peace. World War II happened because Japan-Axis bloc wanted to lock-in on raw material source and markets.

    I talked to a 70-yr old Briton, who is spending his retirement life in Thailand. He’s like my grandpa but in English version. Having just returned to Thailand for 2 days, he said the situation in the UK is very depressing. He also mentioned the possibility of WWIII. However, we agreed that the world today is different from the world 80 years ago. The world has learned from the fresh experience of US & Britain in Iraq and Afghanistan that hi-tech weaponry are useless. People from different parts of the world talk to each other more. As well, there have been no conflicts that could ignite wars in sight. It is best that the West start to let loose some extent of their wealth and resources to the Orient.

  11. 11 Insanity 23 December 2008 at 6:47 am

    BREAKDOWN

    What we are witnessing is the breakdown of the global economy as a whole.

    One of the early warning signs of breakdown can be seen in the transportation sector, where world shipping volume is in rapid decline. Ocean-going cargo ships are being mothballed and orders for new ships cancelled. Container cargo at the ports of Los Angeles and Long Beach—major ports for Asian-U.S. trade—was down some 10% in November over November 2007. The decline in shipping is also hurting the U.S. railroads, where car-load volume dropped 10% in October over the year before, and the delivery of new rail cars is projected to drop sharply in 2009.

    The mining sector is declining sharply, with cutbacks in production due to falling demand and falling prices. Rio Tinto, one of the largest mining concerns in the world, has announced that it will cut its workforce by 13%, put many of its mines up for sale, and slash capital spending.

    The combined effects of cutbacks in mining and cargo transportation reflect a breakdown in the global supply chain. If the mines do not produce and the ores do not ship, then the fertilizers necessary for agriculture and the metals necessary for manufacturing will not be produced, with devastating consequences.

    These declines are accelerating as the effects of the financial collapse spread. We are losing the capability to produce and transport products upon which human life depends, and the consequences will be horrific. According to the UN Food ad Agriculture Organization, 14% of the world’s population—some 963 million people—are malnourished, an increase of 40 million people in one year.

    What is rapidly falling apart is the whole globalization model, and the post-industrial society. The US and Europe having stripped its industrial might in favor of outsourcing production and relying on services, information, and finance to drive their economy, now find themselves in deep trouble on every front. At the same time, the nations to which they shifted their production, notably China, are in deep trouble, as shipping collapses and consumer demand in the U.S. and Europe drops. The whole world is breaking apart.

    This can be reversed, but only if we abandon the foolish policies which brought us to this point. The financial system is finished, and the bailouts are only making matters worse.

  12. 12 Insanity 23 December 2008 at 6:56 am

    Bailouts Won’t Save a Global Economy That’s Breaking Apart!

    The world financial system is going down, and the only real question is whether the mayor world powers have the sense to reorganize it before it disintegrates completely.

    That same warning applies to society itself. As the banking system crumbles around us, governments slide deeper into the red, as the world productive base continues its slide into oblivion, what are we doing about it? Is our very civilization itself not disintegrating before our very eyes?

  13. 13 Insanity 23 December 2008 at 7:17 am

    An option:
    The world requires very large-scale investment in basic economic infrastructure and other large scale development projects. (Thailand included)

    It means also, a new tariff system, a protectionist system, which guarantees to each nation, that its investment in production, which everybody has supported, presumably, is going to be protected in price. We can not have a low-price economy. The problem in China, for example, is, the prices at which China is able to have an export market, the prices are too low! You cannot maintain China’s population with those prices. And the reason this was done, was to lower the price of production below the cost of production! So we moved production out of Europe, and out of North America, we moved it to prices below the actual, physical cost of production, considering the capital investment in technology. Therefore, you take and dump on China and other countries, you dump an export market for them, but then you don’t allow them to earn enough to support their entire population in development. The same thing happens in Africa. The same thing has happened in South America and Central America, in recent periods, mainly since the 1970s.

  14. 14 Gloomy Observer 23 December 2008 at 9:50 am

    The really annoying thing is that some people (Roubini, Stephen Roach, et al.]have been warning about the inevitability of all this since 2004; I’ve been waiting for it since then too (despite many, many put-downs in 2004/5/6 and 07), watching the luxury car we were all sitting in moving ever closer to the edge of the cliff….

    …well now we are going over, and the Chinese and the US still think ‘forward’ is the solution, not reverse!

    The US is STILL trying to spend more than it earns and prop up banks that make phantom profits from phoney transactions. And China is aiming to keep selling to everyone and pocketing the surplus.

    Einstein said to repeat the same failed actions again and again in the hope of a different outcome is a clear sign of insanity. He was right.

    Btw, an ASEAN/China/Japan trade bloc will do what? They are all trying to run current account surpluses – how can they do this with eachother? Who will do all the buying, and who the lending?

    Ultimately, all of Asia needs to spend more (starting with pro-poor pro-consumption policies: ironically, what Thaksin ordered) while the West needs to learn a ‘1997’ lesson or three.

    Will they?

    If not, there is simply no telling how bad this is all going to get. I’m bunkered down already…

  15. 15 ray 23 December 2008 at 11:38 am

    insanity,
    i agree with u completely that the bailouts are making the crisis worse.they are throwing good money after bad money. they should let weak banks fail and let stronger banks buy them at discount rate and run a profitable operation. u should google peter schiff. he predicted this mess 2-3 years ago also said the fed will run the printing presses 24/7.

    also ct i agree with yr english grandpa. ww2 pulled us out of the great depression. iraq/afgahan war pull the united states out of the due recession/slowdown after the dotcom bubble burst in 2001-2002, and thus this bubble was created.i think the next war will be in pakistan. obama already wants to put more troops in pakistan and on other side india might also attack pakistan because of what happened in mumbai. next year there is general elections in india. if the bjp( hardline hindu) comes to power then there is a very big possibilty of an attack on islamabad.
    fdl, buy gold to hedge against hyperinfation. ( i have bought some)

    thailand will devalue the baht. this is all they know to solve any economic crisis. when all currencies are debasing i think precious metals will soar!!

  16. 16 dooda 23 December 2008 at 2:59 pm

    the economic collapse of Finland has led to regular protests for more than two months now, which include some measures such the preventing of cabinet meeting, invading the parliament, police station and central banks. Was an interesting read, and found it was funny when they complained about pepper spray being used on the protesters which is nothing compared to those chinese made tear gas used by Thai police.

    http://aftaka.org/2008/12/12/direct-action-in-iceland/

    http://aftaka.org/2008/12/22/actions-continue-in-iceland/


  1. 1 Lucky VII, GFs & other random shit! at The FARANG Speaks 2 Much Trackback on 22 December 2008 at 10:51 am

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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