FTI concerned about rising baht and surging oil prices
Santi Vilassakdanont, the newly elected president of the Federation of Thai Industries, will call an urgent meeting with the group's directors on April 29 to discuss the effects of the appreciating baht and the current oil price surge on industrialists in order to prepare recommendations to the government.
Speaking after his selection by the board yesterday, Santi, a senior executive of Saha Pathana Inter Holding Plc, said the FTI board members were concerned that the current value of the baht might erode Thailand's competitive edge in exports. "Many fear that if the baht continues to rise over the next three to six months, exporters may have to re-quote their sales prices. The baht should be in the range of Bt39 to Bt40 a dollar," he said. The baht closed at Bt37.55 yesterday - a new six-year high. Santi, who replaced Prapat Potiworakul as president, was uncontested in the run for the FTI's top spot after its members elected the board a couple of weeks ago. At that time it became obvious that a majority of directors would support Santi over another potential, Kiatipong Noichaiboon. Both Santi and Kiatipong were vice presidents of FTI at the time. Santi said he would proceed with a strategy of supporting small and medium-sized business - the policy that he had campaigned for to score votes among FTI members. Thienchai Mahasiri, chairman of the FTI subcommittee on textiles, said textile producers were worried that they might lose some clients to competitors who can quote lower prices due to cheaper labour costs. He added that so far, the textile prices were quoted on the basis that a dollar was worth Bt39 to Bt39.50. Thus, he's not certain if buyers will be willing to buy products if the quoted price is Bt37 a dollar. The appreciating Thai baht aside, textile export growth may reach only 6 per cent, due to an absence of bilateral free-trade agreements, against the original target of 8 per cent growth from the last year's export value of $3.5 billion. Originally, the industry had expected textile exports to stitch up double-digit growth on the assumption that FTAs with the US and Japan were going to be inked. Surapong Pisitpattanapong, spokesman for the FTI Automotive Industry Club, said the rising baht should not affect auto exports because the orders came mostly from parent companies. But businesses in general are concerned about the impact from the current oil price surge, he said. Nonetheless, the auto sector expects that domestic auto sales this year to rise 5 per cent.
Watcharapong Thongrung The Nation
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