Thailand explores ways of maintaining market share after Vietnam devalues currency

BANGKOK, Feb 13 — In an attempt to maintain market share in the global market after Vietnam devalued it currency dong, Thai Commerce Minister Pornthiva Nakasai has come up with three measures aimed at competing against cheaper Vietnamese goods.

In her instruction to Thai commercial attachés based overseas through the Export Promotion Department, Mrs Pornthiva said attempts must be made on maintaining market share for Thai goods in overseas, encouraging Thai exporters on lowering logistics costs, and to organise roadshows and goods exhibitions in key countries which import Thai goods.

Last Friday, the State Bank of Vietnam devalued the dong currency in a bid to tackle its huge trade deficit and high inflation in the country.

The new reference rate is 20,693 dong per dollar, down from 18,932 in place since last August.

Friday’s devaluation came after the ruling Communist Party last month set an economic framework for the coming years as its leaders noted a need to stabilise the macroeconomy. Because of the devaluation, Vietnam may overtake Thailand in rice exports, as Hanoi in 2010 was able to export rice of nearly 7 million tones worth more than US$3.23 billion, a new record both in terms of volume and earnings.

Currently, Vietnam ranks ninth among largest importer of Thailand’s exports. In 2010, exported goods to Vietnam from Thailand were valued at more than US$5.84 billion, up 25 per cent from the previous year, and the country enjoyed a trade surplus of about $3.29 billion.

Key Thai exports to Vietnam are furnished oil products, plastic resin, iron and steel products, chemical products, automobile and parts, rubber products, air conditioners and parts, and motorcycles and parts.

The weakening dong may, however, benefit Thai investors in Vietnam. Some Thai businessmen have invested in textile and food processing businesses in that country, the Thai Commerce Ministry noted. (MCOT online news)