Competitiveness: USA on offense against China for Thailand’s fruit market hurt Thai producers

Thai fruits proved popular globally as locally, import hits

  • By Pooky, Thai Intel’s economics journalist

Julie Chung, of the USA Embassy in Thailand, just twittered, that the USA is staging a large exhibition at Central World, to promote USA fruits, such as apple, pears, grapes, orange and others.

According to Horti Asia, a few years back,  about 2007 to 2008, the total market size for fruits and vegetable in Thailand is about US$10 billion, with the UN agriculture arm, saying that Thailand ranks fourth in Asia, as the largest producer of fruits and vegetables, and that in 2008, Thailand exported about US$420 million in tropical fruits globally.

  • From the such large size, if could be speculated, that a great number of Thais depend on the business. And while large-scale fruit and vegetable plantation exists, it could be speculated further, that most Thais who are involved with fruit and vegetables farming in Thailand, are SMEs in size.
  • The products Julie talked about, being again, apple, pears, orange, grapes and others, in Thailand, is currently dominated by China.

China’s fruit imports, into Thailand, unlike the USA, targets a broad segment of the Thai society, being sold, from traditional open air markets, street hawk, to even super markets where USA products are seldom available.

  • The clash between USA and China, in Thailand, on the fruits market, could have an impact on Thailand’s local fruit industry, but mostly not directly.

However, Chinese and USA fruit imports, often eats into the sales of other Thai fruits. In fact, often, when Thai fruit prices falls, practically every Thai government, will call on the Thais to consume more local fruits to help support the price.

  • Indeed, the upper segment of the Thai society, have embraced foreign fruit imports, even when the imports is more expensive than local fruits.

Additionally, locally, Thailand is attempting to develop its fruit quality offering and also in diversification.

  • As example, a few years back, Thailand dove into grape growing and also large-scale orange plantations. That Thai dive into quality orange and grape, was counted by a flood of cheap grapes and orange from both China and USA.

Eventually, that drive into quality orange and entering the grape business by Thailand, was greatly damaged, by cheaper and better quality imports from China and USA.

  • Today, Thailand have nearly abandoned its push into quality orange and grape local produced business.

However, Thai fruits is gaining global acceptance, with Horti Asia, saying that Thai tropical fruits is rapidly gaining popularity in non traditional markets such as Hong Kong, China and Japan, and is proving, again, popular in France, Canada, Sweden and Germany.

While these products have proved popular, Thai officials, says that because of the Euro Crisis, impacting the Euro Zone for many years now, the export of Thai tropical fruits to Europe, growing at about 7% to 10% a years, have now stagnated.