Thai Baht Strong 7%|
'Export' Revenue Decreases
TMB Analytics Expects 7% Yearly Solid Baht, Affects Export Business 'Reveals' gross margin down from normal to 6%, but foreign aid Importer - Domestic Sales
Mr.Naris Stapoldecha, Executive of TMB Economic Analysis Center (TMB) reported a 7% appreciation of the baht for the whole year. The export revenue contracted by Bt100bn. As a result, the gross margin dropped from normal to 6%, but helped importers and sellers in the country. Most of them are foreign companies.
Thailand's exports this year will grow brighter. In the first eight months of this year, exports increased by 9%, with average export revenue of $ 19 billion. The export business has to cope with the sharp appreciation of the Baht since the beginning of the year from the exchange rate of 35.8 Baht / US $ to 33.3 Baht / US $. In the past September. And because the Thai economy is growing well. In particular, tourism revenue will increase in the last quarter. As a result, at the end of 2017, Expected to be 33.3 US dollars or 7% strength from the beginning of 2017.
The appreciation of the Thai baht will affect the business income more or less depending on the proportion of dependence on export revenue and the proportion of the cost of expenditure arising from domestic purchases or imports. The Analysis Center The impact of baht appreciation since the beginning of the year. Through analysis of business structure and business income statement. It found that net export revenue (Export-Import) in the year 2017 will be reduced by 25 billion, divided into three main groups of impact:
1. Negative impact is a business that relies on income from exports and raw materials in the country. It is expected that the strong baht will result in a net loss of Bt9.9bn to the gross profit margins from 1-6%. Rubber, Tapioca, Rice, Food, Jewelery and Jewelry Most of them are Thai entrepreneurs. 80%
2. The beneficiary group is the domestic sales and import of raw materials. The baht appreciation will result in a lower gross margin of Bt7.4bn and a gross profit margin of 1-2%. Machinery and parts dealers Consumer goods, steel traders, electrical appliances Pharmaceuticals and Pharmaceuticals Most of them are foreign entrepreneurs. 60%. 3. The group is not affected. It is a business that relies on export revenue, but uses imported raw materials, which can hedge against foreign exchange risk in the nature of business itself (Natural Hedging). Electronic / computer and parts and chemicals, most of which are foreign operators.
The baht strengthened. Negative impact on the profitability of the business depends on the export of raw materials in the country. Most of them are Thai entrepreneurs. However, this is a positive sign for the local importers and sellers. Most of them are foreign entrepreneurs.
In 2016, the Center for Analysis Looking at export business still faces the risk of appreciation of the baht, it is expected that by the end of 2018, the exchange rate will be 32.5 baht per US dollar. It is expected to increase by 2.5% from the end of 2017, due to continued improvement in Thai economic fundamentals. Exports and tourism are also boosted by foreign direct investment (FDI) and foreign capital flowing into the Thai stock market. Therefore, entrepreneurs should look for tools to help protect against currency risks. To reduce the impact of the baht to strengthen. Maintaining profitability and supporting competitiveness in the market. Especially SMEs who do not protect the risk.
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