Chinese traders now control most fruit shipments to China raising fears of future market dominance & control.
Fruit traders from China are more and more dealing with Thai fruit farmers directly, handling their own exports rather than going through Thai brokers and middlemen, slowly gaining control over the Thai fruit industry.
Thailand exported 12.6 billion baht worth of fruit to China in 2014 after only 4.42 billion in 2007. Durian is the favourite Thai imported fruit in China, making up 41% of fruit exports to China in 2014, this is followed by longan at 21% and mangosteen 12%.
A fruit-trading source said Chinese traders now control most of the fruit shipments to China, with roughly 1,000 Chinese traders doing business in Thailand. There are fears that the Chinese will soon dominate Thailand's fruit market, driving prices down.
Tighter government controls
In response to this trend, the government is set to tighten controls on fruit trading.
Many Chinese traders now negotiate directly with Thai farmers at their orchards and then export directly to China, particularly in Chumphon, Chanthaburi, Rayong and Trat provinces, say experts.
Entry of Chinese traders into the Thai fruit market creates more competition among middlemen or brokers, which eventually benefits farmers with better deals for them. But over the long-term this practice could actually have a negative effect on Thai farmers and small local traders, if Chinese trading expands and dominates the fruit market, gaining the ability to control prices in the market.
The Commerce Ministry has a plan to require Chinese traders to register and use standardised purchase contracts. There have been cases when Chinese traders breach their futures contracts, refusing to buy all the fruit, such as longans, from farmers at agreed-upon prices if the quality drops.
