Tropical fruit a sweet spot for Thailand and China
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.
