EXIM Thailand Urges Exporters to Manage International Trade Risks amid COVID-19 Pandemic, Adapt to Global Economic Direction and Cope with Non-payment of Foreign Buyers

EXIM Thailand President further said that, according to Euler Hermes, a leading global trade credit insurance agency, the contagion is predicted to aggravate global trade losses of 3.5 trillion US dollars and a rise in global insolvencies of over 20%. Therefore, Thai exporters have to manage international trade risks by diversifying their export markets, focusing on the promising markets with new generation still having high purchasing power, such as new frontiers like the CLMV (Cambodia, Lao PDR, Myanmar and Vietnam), South Asia and Africa. Meanwhile, Thai exporters, SME exporters in particular, which have low bargaining power and small working capital, need to manage non-payment risk as the pandemic might disable buyers overseas to distribute their goods, hence delayed payment or payment default. A survey on the short-term impact of COVID-19 on businesses by Berne Union, a global association of export credit agencies (ECAs), in April 2020 shows that ECAs in the USA and various countries in Europe and Asia have since February 2020 faced an upward trend of exporters’ notification of their overseas buyers’ overdue payment, thus signaling buyers’ possible default of payment for the quarter 3-4 of the year.

In the first five months of 2020 (January-May 2020), the number of EXIM Thailand’s export insurance clients that have filed documents on foreign buyers’ delayed payment has surged by 195% involving the total outstanding overdue amount of more than 617.33 million baht, 24 clients have filed for insurance claims amounting to 284.97 million baht, a 226% increase from 12 clients for claim request amount of 87.50 million baht year-on-year. It has mainly due to buyers’ non-payment for goods (92%), followed by bankruptcy of buyers (8%). Countries that top the list of insurance claim value are the UAE, the USA and France, and types of products for which claim payment is highest are rice, canned foods, gems and jewelry.

“EXIM Thailand has more than 26-year experience and expertise in helping exporters manage their international trade risk. The Bank has developed export credit insurance service since 1994 with total insurance coverage of over 1.37 trillion baht in export business volume. However, the key to success is that exporters need to be aware of the importance of ongoing management of international trade risk to ensure their business continuity even during the time of crises where there are challenges that always come with new business opportunities,” added Mr. Pisit.

• ข่าวBank of Thailand
• ข่าวDepression
• ข่าวo:fin
• ข่าวen