Tropical fruit a sweet spot for Thailand and China

[webfact]

CHINA BUSINESS WEEKLY
Tropical fruit a sweet spot for Thailand and China
Suwatchai Songwanich
Chief executive Officer,
Bangkok Bank (China)

BANGKOK: -- The Chinese are enthusiastic consumers of fruit, downing about twice the world average. This is fortunate for Thailand, the source of half of the tropical fruit imported by China.

Given the size of the Chinese population and its rising middle class, the potential of this market is huge.

Indeed Thai shipments of fruit to China have been skyrocketing since the early-harvest China-Asean free-trade agreement was sealed in 2004, sometimes even doubling in a single year.

Besides the early-harvest agreement, there have been other major boosts to the industry.

Of particular importance was 2011's memorandum of understanding on quality supervision, inspections and quarantines. Another lift came from new transport links such as the Thai-Laos Friendship Bridge at Chiang Khong.

Now, cargo containers are being replaced by refrigerated trucks, enabling much faster delivery to market and fresher produce.

This is further stimulating demand and in November, China signed the biggest-ever fruit deal with Thailand - an order for 174,000 tonnes of longan worth Bt10.8 billion.

While more Chinese have learnt to love durian, demand for other tropical fruits such as mangosteen is also surging, including a spurt in the production of the small, sweet Thai egg bananas called kluay kai, which are sold directly to brokers at excellent prices.

Faced with seemingly insatiable demand from China, the challenge for Thailand is to provide adequate supply together with efficient delivery. While transportation by refrigerated trucks is cheaper than by air, it is still more expensive than by containers.

Despite this, fruit exports by road are soaring and the development of special economic zones in border areas will accelerate this trend, together with the development of cold storage, distribution centres and logistics services.

New rail links will also help

Thai fruit exporters, beginning with the electric rail route running from China through Laos to Nong Kai, Saraburi, Bangkok and Rayong, scheduled for completion in 2022.

With new transport and distribution options being put in place, the major challenge for Thailand will be increasing harvests. Perhaps Thai rubber tappers should consider replacing at least some of their trees with tropical fruit trees.

Source: http://www.nationmultimedia.com/opinion/Tropical-fruit-a-sweet-spot-for-Thailand-and-China-30251706.html


-- The Nation 2015-01-12

[Dannyboy666]

An Excellent Idea for Rubber Farmers...

[yellowboat]

Too bad the Thai middle class is not rising. Still the roads and rails to China are a good thing.

[chooka]

The Chinese own a number of large tropical fruit farms in Northern Australia which supplies Chinese demand.

[yellowboat]

The Chinese own a number of large tropical fruit farms in Northern Australia which supplies Chinese demand.

The demand is staggering

[noitom]

Thai student body right - Now they should replace rubber with tropical fruit.

[jaltsc]

"The Chinese are enthusiastic consumers of fruit, downing about twice the world average. This is fortunate for Thailand, the source of half of the tropical fruit imported by China."

They just like the idea that now they have peels, pits and other remains of the fruit to throw on the floor along with all the other crap from the rest of their meal, while they turn restaurants into garbage dumps.

Edited January 12, 2015 by jaltsc

[Bakseeda]

The Chinese own a number of large tropical fruit farms in Northern Australia which supplies Chinese demand.

Sorry Chooka.... but what does that have to do with Thailands export situation...

[bangon04]

The only places I can get Asian yellow mango in London is in the Chinese supermarkets....

[rickirs]

Thailand needs to be careful about placing all its fruit in one basket. Imported fruit is a luxury that comes usually with a premium price over domestic fruit. Should the chinese economy continue to deflate, the Chinese will focus their household spending on domestic products. If imported fruit isn't priced close to domestic alternatives, demand for Thai fruit will drop. Thailand should continue to diversify its fruit markets to other nations.

[Tomtomtom69]

Thailand needs to be careful about placing all its fruit in one basket. Imported fruit is a luxury that comes usually with a premium price over domestic fruit. Should the chinese economy continue to deflate, the Chinese will focus their household spending on domestic products. If imported fruit isn't priced close to domestic alternatives, demand for Thai fruit will drop. Thailand should continue to diversify its fruit markets to other nations.

Thai fruit isn't that expensive in China and China only has a tiny few tropical areas that may be suitable for the production of tropical fruits such as mangosteens, longan etc. including Xishuangbanna so there is no way China can ever grow all these types of tropical fruits and it doesn't have the land available located in tropical climates necessary to grow these fruits.

And now with Thailand not exactly having good relations with many of the western democratic nations, don't you think it makes continued sense to ship to China? After all, China is not far away and doesn't care about the political situation in Thailand plus it has a huge market, the world's largest.

The only other market Thailand should focus on is ASEAN, particularly Singapore, which due to it's small physical size, lack of agricultural land and high purchasing power, as well as proximity to Thailand makes a good market for Thai fruit.

Edited January 12, 2015 by Tomtomtom69

[Tomtomtom69]

"Of particular importance was 2011's memorandum of understanding on quality supervision, inspections and quarantines. Another lift came from new transport links such as the Thai-Laos Friendship Bridge at Chiang Khong."

The presence of the Friendship Bridge doesn't really make any big difference - there are other border checkpoints that could be used such as Nan province's Huay Kon checkpoint or the one in Tha Li or the 1st Friendship Bridge. All really depends on where the fruit is being sourced from. If it's Chiang Mai or Chiang Rai, Chiang Khong's new Friendship Bridge helps but otherwise it doesn't make a big difference - even with the previous ferry service it wasn't a big deal.

"Now, cargo containers are being replaced by refrigerated trucks, enabling much faster delivery to market and fresher produce."

I remember reading an article on Bangkok Post a while ago now, around 2-3 years ago that Thai fruit trucks were allowed to drive into China as far as Jinghong. I've been to that part of China and didn't see a single Thai registered truck there, only Lao registered ones.

If freshness and speed of delivery are concerns, then China needs to allow Thai trucks into China to deliver their fruit. Switching vehicles at the Lao/China border is time-consuming and pointless. After all, Chinese cars can enter Thailand so one would expect some kind of reciprocity.

[Tomtomtom69]

The Chinese own a number of large tropical fruit farms in Northern Australia which supplies Chinese demand.

Sorry Chooka.... but what does that have to do with Thailands export situation...

I don't care about Thailand's export situation. The Thailand-Australia FTA was so unfair to Australian businesses including car manufacturers that it was the nail in the coffin that destroyed Australia's car industry - Australia allowed tariff free imports of Thai vehicles but the Thais still hit Aussie cars with a large non-tariff tax. I think it's great that the Chinese are investing in tropical fruit farms in Australia so no more economic devastation is unleashed by allowing imports of foreign fruit that we can grow ourselves and which of course is far fresher and tastes better than any imported stuff.

So Thailand, please keep exporting to China and maybe ASEAN. We Aussies certainly don't want your fruit as we have our own. But anyway, thanks for importing our temperate climate fruits such as grapes, raspberries, blueberries etc.

[wileycoyote]

Good for exports

[timber]

As long as China is not in a recession, Thailand will never be able to satisfy the Chinese demand. So it is just a matter

of return on the investment. Can fruit match the return on rubber?. Have to have a variety of crops so all the money

doesn't come in one month. Some crops obviously give better returns than others. The writing has been on the wall

for twenty years. Cheap semi-skilled labour for Japan and food for China. Thailand will have to monitor fruit coming

into the country, just like California, to ensure there is a minimum exposure to foreign crop diseases. Government can

increase the yields, do some marketing, micro climate crop research, and help the farmer rather than politicians friends.

Help the farmer realize where the best return are, and provide community agriculture advisers.

[Mudcrab]

The Chinese own a number of large tropical fruit farms in Northern Australia which supplies Chinese demand.

Do you happen to know the names or locations of the alleged large tropical fruit farms that the Chinese own in Northern Australia?

The only Chinese I ever see in the North are back packers working on Aussie owned farms.

[Alwyn]

I bet China wishes it had a little bit of land so it could grow it's own fruit