Textile trade faces stiff foreign competition

Thai textile and garment producers are expected to face stiff competition from cheaper imported products as a result of the appreciating baht, according to Kasikorn Research Centre.
The centre forecast that imports of finished garment products next year would be worth US$260 million (99.1 billion), an increase of 30 per cent from this year. A rising volume of low-end products from China, India and Vietnam and high-end products from Hong Kong and Japan is expected to continue to flow into the country. The cheaper imports from China and India will benefit from an increasing demand for cheap garments from people affected by the recent floods. At the same time, as the baht at present stands at Bt37.9 to the dollar and is likely to rise further to Bt35.4 next year, a number of consumers are shifting to high-end garments. Thai imports of medium- to high-quality textiles in the first 10 months of this year rose by 54.7 per cent compared to the same period last year. High-end imports from Japan, Hong Kong, Singapore and Taiwan rose to $35.8 million. Hong Kong, the second most active textile-exporter after China, sold $24.9 million, an increase of 53.8 per cent compared to the same period last year. The imports of textiles have been influenced by the rise of the baht. In 1997, shortly before the financial crisis, imports of high-end textiles from these countries totalled $22.8 million. After the crisis struck, imports dropped to $10.1 million in 1998 and $6.9 million in 1999. Imports of high-end products started to pick up to $19.5 million in 2005. The centre also noted that consumer spending on garments per household had risen from Bt311 per household or a total of Bt70 billion in 2004 to Bt366 per household or a total of Bt84 billion this year, according to the National Statistics Office. The textile industry is connected to various sectors such as spinning, dyeing and yarning, but the producers are expected to face increasing pressure from restrictive measures imposed by such major importers as the US and the EU. The centre expects that the trend would continue to rise next year. Thai producers thus will have to adjust themselves by upgrading their productivity and product quality to survive.
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