October 19, 2010

Strong baht impedes Thai shrimp, chicken exports

A number of Thai shrimp, chicken exporters have stopped taking any new purchasing order to avoid further loss from the strengthening Thai baht, according to the Department of Export Promotion.

The exporters have asked for government's assistant measures to support market liquidity and reduce costs. The Department of Export Promotion Director-General, Nanthawan Sakunthanak said she would have a meeting this week with textiles, leather, and processed food exporters to discuss immediate measures to help soften the impact of the baht.

Most exporters have suggested several ways in which the government could assist them. These included granting them loans equivalent to the difference in the amount receivable resulting from exchange rates and allowing them to use the greenback as collateral for the loans.

Also, they urged a six-month tax break, extra-low-interest loans, and the banks to peg the rate of exchange at 32 baht per US dollar.

The exporters also called for the government to come up with tax measures aimed at reducing the costs of raw materials, production and labors, while opening more trading boards for chicken meat exporters.

Meanwhile, director general of Internal Trade Department Watcharee Wimuktayon Watcharee said the Commerce Ministry will request a budget worth THB500 million (US$16.7 million) before the Cabinet next week to help exporters who have been affected by the baht's appreciation.

About THB200-300 million (US$6.7-$10 million) of the total budget will be used to help SME exporters who are unable to export their products and distribute them in the domestic market instead.

The rest of the budget will be used to organise fairs selling discounted goods to help keep the cost of living low.