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Thailand Shipping Report Q4 2010
Business Monitor International, Oct 2010, Pages: 108
Thailand Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Thailand's shipping industry.
Speaking at a seminar in Bangkok in early September, Thai foreign minister Kasit Piromya stressed the importance of developing the country's shipping industry. He said Thailand was an export-oriented economy where 60-70% of GDP was linked to foreign trade. Around 98% of exports are transported by sea. He said that shipping needed to be promoted as part of the government's second stimulus package, designed to counter the recession and promote private sector development. The minister said that the Eastern seaboard and the ports of Laem Chabang and U-tapao had an important role to play to support ASEAN Connectivity, an initiative launched by Prime Minister Abhisit Vejjajiva in 2009. Thailand also had a role to play to connect the hinterland of China to ports on the Indian and Pacific oceans, he said.
Thailand continues to suffer from an ongoing and intermittently explosive political crisis, but as the country progresses through H210, it is enjoying a period of political respite and strong economic growth, to the benefit of the ports and shipping sector. The economy has been driven by inventory restocking in the early part of the year, and this was followed by signs of a reasonably well based recovery in private consumption, supported by low unemployment and rising consumer confidence levels. A package of tax incentives introduced in May seemed to be doing its job to attract more foreign businesses to invest in the country. BMI therefore reaffirmed its relatively conservative projection of 3.6% GDP growth in 2010,
followed by 3.7% in 2011. On economic grounds alone, there is upside risk to this projection, but the possibility of a resumption of the political crisis ahead of planned elections in early 2011 points in the other direction.
According to BMI estimates the port of Laem Chabang managed to defy the downturn in 2009, posting a volume increase of 4.1% year-on-year (y-o-y) and handling 46.2mn tonnes of cargo. This year the port is seeing further volume growth, with a gain of 11.5% to 51.47mn tonnes. In subsequent years BMI expects the pace to ease, with growth in the high single digits. The port of Bangkok, according to data from the port authorities, posted a decrease in handling of 12.4% y-o-y in 2009, with the facility handling 15.6mn tonnes of cargo. However, this year they see a recovery with 6.6% volume growth to 16.60mn tonnes. Using the same ports as examples for container throughput BMI notes that in 2009 box volumes at the port of Laem Chabang fell by an estimated 10.0% and Bangkok's throughput declined by 10.3%. In 2010, they predict y-o-y growth in throughput for both ports. Laem Chabang's box traffic is estimated to increase by 10.0% to 5.08mn 20-foot equivalent units (TEUs), with throughput at Bangkok forecast to grow by 7.3% to 1.41mn TEUs.
Thailand's total trade fell by an estimated 16.1% in 2009, on the back of a global trade decline. Imports were worst affected, falling by 20.2% y-o-y. Trade is picking up in 2010, with BMI's country risk team forecasting growth of 10.5%. Over the rest of the medium term (2011-2014) they estimate that Thailand's total trade will increase by a yearly average of 6.2%.
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