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Published on July 20, 2007

Most Lao garment exporters trade in foreign currency, often buying raw materials and paying for transport costs in US dollars, so they experience fewer effects of currency fluctuations.

Lao Garment managing director Somphiene Saiyadeth this week said he bought raw materials in dollars and sold his products to European countries in dollars, without significant impact from the rising baht.

He also said there was no effect on the cost of transportation through Thailand, because contracts with Thai transport companies were also paid in dollars.

The raw materials imported for his factory were from not only Thailand, but also other Asian countries, at prices set in dollars. The only effect on Lao garment companies would occur when supplies were imported from Thailand and paid for in baht.

"For example, we usually have to pay 288 million kip [Bt1 million] to buy supplies from Thailand, but now I have to pay  more, because we get fewer baht  exchanging from the dollar," he said.

He also said while the kip/dollar rate was stable, he did not worry about needing to pay more for domestic labour costs and  supplies, such as electricity and other costs.

Vientiane Times

Asia News Network

VIENTIANE