Lamyai marketing/selling/other

[Bluetongue]

In the Pong Nam Ron/Soi Dao districts of Chantaburi the lamyai industry is flourishing but for how long? From what I have worked out myself and from talking to experienced locals there are several reasons why it has gone well especially in returns as opposed to the lamyai in the north around Chiang Mai etc. Here the picking season is maybe September to May but really picks up in November/December and again in March/April. I believe in the north that it is mostly June to August, please correct me if I am wrong. The timing of our crop is different to other sources of lamyai for China such as China itself, Vietnam, Taiwan. This is because the growers here use precursors to force flowering as opposed to the natural flowering in colder higher altitude places. Although it is said this small plateau we are on here is a perfect microclimate for lamyai. We also irrigate. Also the locals say (with the greatest respect to the northerners) that we are producing a higher quality product, sweeter and larger. It may be that we have a different variety of tree, though I am not sure on this point. Being closer to the shipping ports is probably an advantage too.

In 2012 I started noticing more and more lamyai depots opening up as well as more and more large scale plantations. It is literally one new place a month. There must be well over 100 companies in this area now and already I have seen some of them go broke and others seem to have very little business. They have to get their fruit from somewhere but buying it in advance as they are doing is surely going to create problems. Also the dilemma for producers is you are locking in a price that may be good or it may be much lower than you could get on the spot. Here is my personal example.

I along with wife have been a lamyai producer for 4 years now. In 2011 we rented for five years an orchard of 73 trees, mostly mature. It is fair to say the first year was a steep learning curve for me and not as easy as she thought either. In October about 2 months before the fruit was ready a Thai man came around accompanied by a non-Thai speaking Chinese man. About 7 of us have orchards on family land here and as a group he offered to buy our fruit for 30bht a kilo, for graded fruit and 3bht for what they call “look hin”, basically very small which he doesn’t want but can resell for 7 baht (as can we). This is on the basis of him paying the fruit pickers. We all sold and on contract signature he handed over 30k baht as a deposit. Those that had more trees got a bigger deposit, some got 50k.

In 2012 one of our own orchards had 65 trees ready to go so we worked 2 plots. And we did a much better job. This time he came around in August about 4 months before, with no Chinese man in tow and offered 32bht a kilo and again we sold, the deposit was the same. He had several million in the Fortuner that day from what I could see. When they came to pick the fruit the Thai foreman offered us 7baht for the small fruit instead of 3 as he was going to resell personally. So we had a really good return.

In 2013 our second orchard came on line with 35 trees so we worked three plots. There were a lot of problems not least of which was both the wife and I were hospitalised at a crucial time but around the area the total crop was hit and miss. The Thai man came around in January ie before we had moved a jot in the production cycle and offered us all 33bht. We bargained for a while but he wouldn’t budge so we sold eventually. The deposit was the same. As we had a difficult year they came around to collect what they could and left a lot to get bigger. When we went to get paid he told us to collect the rest ourselves and he would pay us the picking rate plus transportation costs. So we did that and ended up above even but not much. However whilst we were doing that another Thai man came around with Chinese man and offered to buy the 2014 crop for 39baht and a much larger deposit in our case 100k. My neighbour got 200k. Naturally we all sold. While I was waiting for the previous company to unload my truck one night the first Thai man came over and sounded me out about buying the 2014 crop. This is in very early January.

Anyway for 2014 I decided to take a break from it and just watch and we rented our 170 trees for a percentage of the gross. Mid year I agreed to do the same for 2015. I have just found out that the buyer came around in November offering 40bht for the 2015 crop, which has been sold before the 2014 crop is off the tree. A 150k baht deposit has been paid. I cannot see how this can be sustained. I keep a record of all my costs and I am careful to use the deposit for those first, however my next door neighbour who has already spent the 200k deposit from this year is already working his way through next years. He has no idea of his costs. I reckon the costs are about 50% higher per tree now as opposed to 2011. Partly because our trees are bigger though.

Anyone got any comments on what might happen or similar observations on other industries?