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NEWS UPDATES Asean Affairs        24  March 2011

Japan trade drop

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Thailand's exports to Japan have begun to feel the pinch from the devastating disasters there with importers delaying shipments.

Meanwhile ports and road transport in Tokyo are congested as activities shift from affected coastal areas to the capital.

Pallapa Sakdarak, a commercial adviser with the Export Promotion Department, said automotive parts, electrical appliances and natural rubber had been affected the most as they are the top three exports to Japan.

"Exports will certainly be affected as Thailand is the major manufacturing base for Japanese companies," she said at a forum held by the Federation of Thai Industries on the impact of the tsunami and the nuclear crisis on the Thai economy.

"Importers have asked for delays of shipments over the next three months as production activities in the affected areas have been suspended."

Citing the Industry Ministry, Ms. Pallapa said there were 22 automobile plants in Sendai. Japanese automakers led by Toyota have stopped production because of difficulties in securing parts, the traumatic effect the disaster had on their workers, and electrical blackouts. Japan is the third-largest export market for Thailand after Asean and China, accounting for 10.5 percent of the country's yearly overseas shipments.

Nonetheless, Ms. Pallapa said the building materials, electrical appliances, furniture and food sectors should expect increasing orders from Japan in the near term, leading the ministry to believe overall exports to Japan will not decline.

FTI vice-chairman Tanit Sorat said Thai chicken exporters had received rising orders from Japan, making the sector a beneficiary of recent events. Meanwhile, 13 industrial sectors such as liquefied petroleum gas (LPG), chemicals, air conditioners, machinery and software expect a negative impact.

The FTI expects Japan's crises will reduce Thailand's gross domestic product by 0.1 percentage point due to supply shortages for the automotive and electrical appliance industries. Outbound and inbound tourism are forecast to lose 15-20 billion baht as 980,000 Japanese visit Thailand a year, representing 6.2 percent of international arrivals in the country, Dr Tanit said.

Surasak Thienbunlertrat, general manager of NYK Line (Thailand), said that because shipping activities had been moved to Tokyo because the Sendai port is closed, shipments bound for northeastern and western parts of Japan have been affected as well.

"But we think this is a short-term situation that will ease in the next couple of days. The greater concern is road traffic as petrol is required for relief efforts and there may not be enough for product shipments by truck," he said.

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