Commerce Ministry discusses with China to solve obstacles to exporting Thai fruit to boost sales to 10% target

Thai fruit market

In 2022, Thailand was ranked No. 1 as the country from which China imported the highest value of fruit, with an import volume of 2.17 million tons, worth 4.9 billion dollars, an increase of 3.72%.

Kunming City, Yunnan Province, China is considered an important province for importing from the Thai fruit market. In 2022, Thailand exported fruits to Kunming City in 3 ways:

1. By air via airlines
2. By land via Mohan Pass
3. Laos-China Railway

(Opened in November 2022) Total 276,000 tons, of which the main routes are exported via land via Mohan Pass, a truck pass, with a volume of 270,000 tons, and Mohan Pass, a railway pass, which opened in November 2022, with a volume of 3,700 tons to date.

In order to support the amount of Thai fruit in the upcoming fruit season, it is estimated that this year the amount of Thai fruit will be released into the market no less than 6,780,000 tons, an increase of 3% from the previous year. As a result, the Ministry of Commerce, represented by the Permanent Secretary of Commerce, along with the Director-General of the Department of International Trade Promotion and the group, traveled to Yunnan Province, China, to inspect the Mohan Pass and the Mohan Railway Pass during 27-29 March.

To discuss with the Customs Administration Department to request assistance in facilitating the export of Thai fruits to the Chinese market, and to inspect the specific inspection area of fruit products to prepare for the transportation of Thai fruits through important checkpoints in China during the fruit season.

In the past, Thailand has had problems exporting fruit to China due to China’s Zero-COVID policy, which strictly inspects fruit at many import checkpoints, causing Thai fruit transport trucks waiting for inspection to be stuck at the Chinese border checkpoint for several days, resulting in the fruit rotting.

This has caused damage to exporters, and this problem is feared to have a severe impact on Thailand’s most popular export fruits, which are entering their fruiting season this year.

Mr. Kirati Ratchano, Permanent Secretary of the Ministry of Commerce, said that the Mohan Land Checkpoint is a truck checkpoint. Previously, the traffic in and out was quite heavy due to the single-lane traffic. During the fruit season, there are about 500 cars entering and exiting the checkpoint per day, and the officers have to work overtime from 8:00 p.m. to 9:00 p.m.

But now, China has opened additional traffic lanes (different entry and exit lanes), resulting in more efficient distribution of freight vehicles. In addition, the Chinese government has now lifted the Zero COVID measure without nucleic acid testing for both drivers and goods.

At Mohan Railway Station, fruits can be imported by cold chain containers, with the Laos-China Railway transporting goods into China.
7 trains per day (Cold chain and Non Cold chain) and specific product inspection yard, there are 26 inspection channels for fruits, grains and chilled aquatic animals, divided into 15 specific product inspection channels for fruits, 7 grains and 4 chilled aquatic animals.

Currently, only the fruit inspection yard is in operation, while the GACC of China has already inspected the construction of the grain and frozen seafood inspection yard, and it is expected that the yard will soon be announced to allow the import of related specific products.

Since the opening of the fruit product inspection yard at the end of 2022 until March 14, 2023, a total of 22 lots, 157 containers, and a total volume of 3,675 tons of fruit have been transported via the Laos-China railway. The fruits include 4 containers of durian, 90 containers of longan, 53 containers of banana, and 10 containers of other fruits such as pomelo, coconut, and mango. It is expected that during the upcoming fruit season, the amount of Thai fruit will increase via this route.

On April 19, 2023, 11:30 a.m. – 1:00 p.m., the Kunming Tourism Authority traveled to inspect the Wangjiaying West Railway Station and met with representatives of Speed Inter Transport Co., Ltd. on the occasion of the company transporting 23 containers of Thai fruits to Kunming via the Laos-China Railway. The summary of the issues is as follows:

⁃ 23 containers of fruits from Speed Inter Transport Co., Ltd. consisted of 21 containers of durian and 2 containers of mangosteen.
It is divided into 3 containers to be transported to Jinma Zhengchang Market, Kunming City, and the rest will be sent to other cities in China by truck, such as Chongqing, Guangzhou, Chengdu, Changsha and Jiaxin, etc. This fruit transport is the first train that the company has transported Thai fruit via the Laos-China Railway without having to change to use the Mohan land route (truck checkpoint).

⁃ The Chinese government has provided subsidies for the freight costs of the Laos-China Railway to Chinese logistics operators since its launch in late 2021. Operators will be able to claim 40-50% of the freight costs depending on the type of goods.

Durian products will be supported at a rate of 50%, which is an important factor that allows the company to set rail transport service rates that are close to and competitive with truck transport.

The rail transport takes approximately 3 days from Thailand to Kunming, which is a good sign for the rail transport service providers via the Laos-China railway, who may need to reduce their freight rates to be competitive. This will provide Thai operators with an alternative to fully utilize various transport modes.

⁃ Since December 3, 2021, Wangjiaying West Station has imported 5,600 containers of goods, with the main products being agricultural products and fruits, and exported 9,600 containers of goods, with the main products being woven fabrics, chemical fertilizers, machinery, parts and equipment, and fresh vegetables, etc.

“Currently, the Thai fruit market is entering the market. We must facilitate and if there are any obstacles, we must immediately resolve them. If there is a need to resolve at the policy level, urgently report it to the central office so that obstacles can be resolved promptly and without affecting Thai fruit exports,” said Mr. Keerati.

However, the obstacles that are a problem for exporters are that the transportation costs of the Laos-China railway are higher than the land route, especially the transportation costs of goods to the Laos-China railway. However, transportation via railway has the advantage of short transportation time and can be quickly connected to China’s logistics system.

This has a positive effect on Thai fruit exports, which are perishable products. This problem is a joint venture between China and Laos, which requires discussion to reach a conclusion. It is expected that this can be reduced in the future.

In 2023, the Ministry of Commerce aims to promote fresh fruit exports to China, aiming to increase by 10% from 2022, with a value of 4,287 million dollars. If there are no problems with transportation or logistics systems, it will make the transportation of Thai fruit to China convenient and fast, giving an advantage over Thai fruit and

If the problem of high transportation costs at Mohan Railway Station can be solved, it will become another important transportation channel that will help increase fruit exports. At present, the competition in the fruit market in China is getting higher and higher with competitors from many countries who want to grab a share of the Chinese market.

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Source of information: Bangkok Business

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