Thai exporters are experiencing the consequences of unchecked export to Europe. After years in which the market was flooded with barely inspected products, the EU has closed its doors. Import requirements were accentuated, products were inspected more often and exporting became practically impossible for Thai entrepreneurs. Veera Likanasudh, managing director of Koerner Agro, is one of the few exporters who has managed to stay standing at the start of the strict rule enforcement. He fears a similar scenario for other countries in the region.
“The Thai products are often checked,” Veera says. Five years ago, Thailand still had 200 exporters, but now only approximately 40 of those are left who are allowed to ship goods to Europe. The cause is the stricter requirements set for vegetables, and a more stringent enforcement of those regulations. That approach followed a considerable number of exceedances of, among other things, MRL standards. Thai exporters sent unchecked products to Europe and, eventually, enough was enough. The EU decided to impose the 669 rule where 10 to 20 per cent of the Thai products which had regularly exceeded the limits had to be inspected upon entry into the EU. Just before the EU announced an import ban, the Thai government decided to keep matters in their own hands. Restraints on exporting to Europe were imposed. Only certified exporters are still allowed on that market.
Stringent requirements, small volumes
“We were one of the first company given permission to export again,” Veera says. The Thai exporter has been working with Nature’s Pride to bring products to the European market for 14 years. Additionally, the exporter has his own sales office in Germany. The assortment mostly consists of baby corn, asparagus, peppers and passion fruit. The company has certificates for the export of these products. All products are transported via airborne freight. The costs of that are sometimes higher than the value of the product, but it is the only solution. Veera looked into seaborne freight, but the transit time between Bangkok and Rotterdam, 30 days, was too long.
“The market is growing,” Veera says. “In recent years we have never had enough volume to meet demand.” In order to meet the stringent European requirements, he invests in the cultivation. “We work with contracted cultivators, and we supply all of the necessary items to them such as seeds, fertilisers and pesticides, in order to have complete control of what they use. We also guarantee a higher price than other traders, but the products have to meet the requirements.” That last part is a challenging combination. Most cultivators want good prices, but at minimal effort.
Lab testing necessary
About 1,000 small cultivators are members of Koerner Agro. On average, these cultivators have less than one hectare of land each. Because GlobalGap certification is a requirement, the cultivators use a special arrangement which the international certification organisation allows for small cultivators. They can request the certificate in groups IE. GLOBALGAP OPTION 2
“I have to be very careful, or I could loose my export licence,” Veera continues. Koerner Agro exports 70 per cent of its products to Europe and the EU is by far its largest market. To prevent losing his licence, Veera has the products tested in European laboratories before exporting them. On average, a Thai laboratory tests for 200 substances, while in Europe they analyse for 400 substances.
Continued stringent testing
The high standards and stringent tests of the EU are here to stay and the Thai government sticks to the strict procedures. “the government is taking it very seriously,” Veera is pleased to say. “if the government does not take it seriously, we could get in trouble again, and we would be boycotted. All trade is now above-board.”
In response to the stricter regulations for Thai exporters, Veera saw many companies leaving for countries in the region. Laos, Burma and Vietnam now export many exotic fruits and vegetables to Europe. “Many products from these countries are not yet inspected regularly by the EU, but that is changing,”. He expects that when the EU discovers many exceedances, like there are now, the EU is sure to apply the 669 rule to these products, just like the Thai products, and these countries will have to raise their standards if they want to continue. Some products from Vietnam, for example, are already appearing on the 669 list. Once they are on there, it is very hard to get off and the only way is to have safe clean products entering the EU.
