Recent reports have confirmed the intention of the authorities in Thailand to increase the amount of trade carried out with Mongolia. This is part of a long-term plan for bilateral trade between the countries to reach as high as US$100 million (3.1 billion baht) in the next couple of years.
Full Details of the Meeting
This information was released following a meeting between Thailand’s Commerce Minister Jurin Laksanawisit and Tumur Amarsanaa, who is the Mongolian ambassador to Thailand. Both sides are keen to find new ways to boost trade between them and increase economic relations.
This was the first time that a Thai commerce minister had got involved in discussions like this with a Mongolian ambassador since the opening of the Mongolian embassy in Bangkok back in 2000.
It forms part of a five-year cooperation plan that began in 2019 and runs up to 2023. The overall idea is to increase the level of cooperation, investment, and bilateral trade between the two countries.
What Products Could Be Traded More?
Among the products expected to be exported to Mongolia are rice and rubber, with Thailand the world’s biggest exporter of the latter in 2019. The amount of quality, safe food produced in Thailand means that Mongolia could become an important market. It is also hoped that medical tourism in Thailand becomes more popular among Mongolians thanks to this agreement.
Some of the other products that Thailand could send to Mongolia include paper and automotive products. From Mongolia, Thailand could import the likes of animals, textiles, and metal ores. The annual average trade value between Thailand and Mongolia over the past five years is $49.8 million.
At the moment, Mongolia sits in sixth place in terms of Thailand’s more important trading partners in East Asia. On a global basis, it is way down in 126th place, though. Looking back over the last five years, the average figure for annual trade between the countries is just under $50 million, and in 2020 it was less than $37 million.
How This Could Affect the National Currencies and Commodity Prices?
Ideally, this new plan for economic cooperation will help both countries to prosper. One of the effects that trade deals like this can have is on the national currency. The right balance of imports and exports helps any country to maintain a strong currency, while too many imports can lead to it being devalued.
Changes like this can be interesting to traders who carry out CFD trading on different commodities or currencies. This type of investment means speculating on future prices without actually buying the asset. In this way, traders use leverage to potentially earn profits even on relatively small price changes.
When natural resources such as food and minerals become more in demand due to new or growing markets, this can lead to their price increasing accordingly. The Mongolian market perhaps isn’t big enough to make a significant impact on the baht or on Thailand’s main exports, but it is certainly worth keeping an eye on new markets like opening up.
All of this means that the new trade approach between Thailand and Mongolia could be of benefit to a wide range of people, from business owners to consumers and traders.