Thailand Posts Weak Trade Data

 

BANGKOK—Thailand reported weak trade activities in May due to lower farm-product shipments and sluggish imports, as the country’s trade deficit shrank.

Exports contracted across the board, falling 2.14% from the same period last year to $19.4 billion, said Nuntawan Sakuntanaga, director-general of the Commerce Ministry’s Department of International Trade Promotion.

Shipments of agricultural products declined 3.5% in May and 6.4% in the first five months this year, the data showed Thursday. This was a result of weak demand and price falls for rubber and sugar, along with a shortage of shrimp, Ms. Nuntawan said.

Rubber shipments dropped 23% in May as key importers, such as China, Malaysia and Japan, delayed orders due to their high stocks. Sugar exports fell 23%, the ministry said in its statement.

Thailand is one of the world’s largest shrimp exporters. But Thai shrimp stocks have been hit hard since 2012 by a bacterial infection, known as early mortality syndrome, which kills shrimp before they can reproduce.

Shrimp output in Thailand fell 54% to 250,000 tons last year, according to the Thai Shrimp Association. As a result, the country’s share of the U.S. shrimp market fell to 22% in 2013 from 36% in 2011.

Recent media reports on alleged labor abuses in Thailand’s fishery industry, particularly in the export-oriented shrimp sector, pose a new challenge to the industry. The U.S. State of Department last week downgraded Thailand to the lowest status—alongside North Korea, Cuba and Iran—in its annual Trafficking in Persons Report. The U.S. report criticized Thailand for taking insufficient action to tackle forced labor and human trafficking in the industry.

Thai seafood and frozen-food operators on Tuesday denied labor abuses and said they would talk to their customers to clarify the situation.

However, Ms. Nuntawan said the downgrade—which means that the U.S. can withhold some non-humanitarian and non-trade-related aid—wouldn’t affect the country’s short-term exports to major buyers.

“We’ll not adjust our projection of exports to the United States and the European countries,” Ms. Nuntawan told reporters Thursday. “In our view, we don’t expect any short-term impact.”

Despite an overall fall in exports of farm products, rice shipments grew 14.8% in value and 67.3% in volume from a year earlier, due to the Thai grain’s competitive price and a weakening Thai baht.

Imports fell 9.32% to $20.2 billion on declines in motor vehicles, motor-vehicle parts and capital goods, the ministry said. It was the 10th consecutive month of contraction but the rate eased from April, helped by increased imports of fuel and consumer products, according to ministry data.

This brought Thailand’s trade deficit to shrink to $809 million, compared with $1.45 billion in April, the ministry said.

TISCO Economic Strategy Unit said in a research note that exports look more promising in the second half of the year, due to an improving global economy. However, the lower imports of capital goods presented a lackluster outlook for investment, it said.

Write to Warangkana Chomchuen at warangkana.chomchuen@wsj.com