Newsletter: January 2006  

Thailand Proves Successful in Battling Larger Competitors

Much of the attention in the post 2005 quota period has been on the success of India, Pakistan and China in rapidly expanding exports of textiles and apparel. Without anywhere near the same attention, Thailand’s exporters have proved successful in expanding exports throughout 2005.  The expansion has occurred despite little domestic production of cotton; nonetheless, cotton apparel exports have enjoyed the most rapid growth.

Thailand’s top export market is the United States; exporters have been successful in obtaining orders from all the major U.S. apparel brands.  During the January through November time period, 31.5% of all exports have moved to the U.S., reaching 1.927 billion U.S. dollars and year-on-year growth of 2.2%.  Despite this success, the Thai exporters and government are pushing hard for additional growth to the U.S. market.  The Thai Garment Manufacturers Association and the Ministry of Commerce are jointly opening a U.S. office to promote one stop sourcing for U.S. apparel brands and retailing.  The U.S. office will simplify orders, transportation, etc.  Thailand’s exporters have also abandoned many of the cheaper, lower end products and moved into the high end products, which changes its competitors.

The European Union is Thailand’s second largest export destination.  Export growth through November 2005 was limited to 1.6%, with shipments of 1,090 billion U.S. dollars.  One reason for this is that EU import demand has been much weaker than in the United States.

One of the most important components to Thailand’s export expansion was the ability of exporters to benefit form the boom in domestic consumption of textiles and apparel through Asia itself.  In 2005, the Asean trade block of nations was the third largest export market for Thailand’s textile and apparel.  It also enjoyed the fastest growth.  January through November exports to this trade block soared 19.0% to 713.8 million U.S. dollars and took 11.7% of all exports.  Strong growth was enjoyed to most of the Asean trade block.  The top markets were Indonesia, Philippines, Vietnam and Malaysia; double-digit export growth was noted to all four.  Exports to Myanmar, Laos and Cambodia were smaller, but also enjoyed double-digit growth.

The Japanese market proved a disappointment in 2005.  Despite Japan increasing the overall volume of textile and apparel imports, Thailand exports were unable to expand market share against China.  January through November exports fell 2.8% to 382.1 million U.S. dollars.  China emerged as a very important market itself.  Through November 2005, China emerged as the fifth largest market, with exports expanding 6.4% to 256.3 million U.S. dollars.

Cumulative January through November textile and apparel exports reached 6.112 billion U.S. dollars, reflecting year-on-year growth of 5.4%; apparel accounted for 3.163 billion of the total.  Within the apparel sector, the strongest growth in exports came in co tton apparel.  Cotton apparel exports expanded 9.9% from year-ago levels to 1.402 billion U.S. dollars, which compares to a 2.3% year-on-year decline in man-made fiber apparel exports to only 678.2 million U.S. dollars. 

Strong growth has been noted in textile exports, woven fabric and yarn exports expanded 7.7% to 1.679 billion U.S. dollars.  Woven fabric accounted for 984.3 million of that total, with cotton fabric exports totaling only 358.5 million U.S. dollars.  Strong growth was noted in man-made fiber yarns, which expanded 11.1%.  Household textile exports expanded to 219.2 million U.S. dollars. 

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