Thailand's Industrial Sentiment Index fell more than a full point, from 96.8 in September to 95.3 last month.

The Federation of Thai Industries (FTI) said the causes were the strong baht, continuing high oil prices and the flooding that affected many parts of the country, all of which reduced consumers' purchasing power.

Of the 35 industries surveyed in the course of calculating the October index, seven showed obvious declines in sentiment: garments, pharmaceuticals, petrochemicals, panel products, leather, aluminium and environmental management.

Seven others showed a rise: natural-gas manufacturers, mining, machinery and metalwork, furniture, gift and decorative products, power production and renewable energy.

Following the calculation of falling industrial sentiment last month, the FTI has called on the government to control the strength of the baht.

FTI chairman Santi Vilassakdanont said the baht had appreciated 12.1 per cent since January, while currencies in countries like China, Malaysia, Vietnam and India had changed less than 5 per cent.

He said if the government did not control the situation as soon as possible, then all industries would be suffering from the effects of the stronger baht by the beginning of next year.

The Bank of Thailand should monitor money flowing into the country for investment or speculation and ease the fluctuating value of the baht by controlling short-term speculation, said Santi.

Thai Gar-ment Manufac-turers' Associa-tion chairman Dej Pathana-sethpong said the stronger baht would affect not only exporters, but also local suppliers.

"If the Thai currency keeps getting stronger, most operators will buy their raw materials from other countries. Then local suppliers will be in trouble," he said.

However, Industry Ministry permanent secretary Chakramon Phasukavanich said the private sector must adapt itself by re-

ducing production costs and increasing productivity. Although Thailand's agricultural products have been directly affected by the baht's strength, prices on the global market have not fallen, because of inadequate supplies.

Chakramon predicted Thailand's economy would grow about 4.5-5.5 per cent next year, while interest rates were expected to fall, helping reduce exporters' production costs.

Surapong Paisitpatnapong, spokesman and treasurer of the Automotive Industry Club, said the stronger baht was making the automotive-parts industry lose its competitiveness, because carmakers were buying parts from other countries that offered cheaper prices.

Surapong said automotive exporters were also affected, because they traded three to six months into the future. He said the automotive industry produced 1 million units in the first 10 months of the year, up about 9 per cent year on year. Of those 1 million units, 433,718 were exported and 567,299 sold domestically.

However, he said domestic sales had declined about 4 per cent, due to high oil prices and the flooding.

Surapong said automotive production declined 3.23 per cent in October from the same month last year.

However, the total value of all automobile, motorbike and automotive-parts exports in the first 10 months of the year increased 15.35 per cent to about Bt313 billion.

A DBS Group analysis said the baht was the best-performing Asian currency this year. As of Tuesday, the baht had posted gains of 12.1 per cent against the US dollar this year. The next-best performer was the South Korean won at 7.7 per cent.

BBS said the dollar had bottomed out at Bt36.42 per dollar about the middle of this month, its lowest level since 1999.

Chalida

Ekvitthayavechnukul

The Nation