China has become a major destination for fruit exports from Asean, with Guangxi, Guangdong, Yunnan and Hunan provinces in the south emerging as key markets thanks to their geographical proximity and close trade with Southeast Asian countries.
China last year imported 6.83 million tonnes of fruit worth US$9.5 billion, representing year-on-year increases of 24% and 25%, respectively, according to the China Chamber of Commerce. Thailand was the top exporter by value, followed by Chile, the Philippines, Vietnam and New Zealand. In terms of fruit types, Thai durian enjoyed the largest export volume, accounting for about half of all fruit exports, followed by longan, mangosteen and young coconut.
This fruitful trade is expected to increase further thanks to the launch by Liaoning Port Group of a new shipping route, dubbed the "Fruit Express Line". Operated by Cosco Shipping, a Chinese multinational transport service whose core business is marine transport and terminal operation, the new line strategically links Dalian Port in northeastern China with Vietnam.
Thanks to the new route, various kinds of fruit imported from Vietnam can be shipped from Ho Chi Minh City to Dalian in just seven days, three to five days shorter than for other Southeast Asian routes to the port, greatly reducing time and cost for fruit traders.
The Zhonghai Santiago undertook the first voyage on the Fruit Express Line, shipping 565 tonnes of dragon fruit from Vietnam. It was delivered to major supermarkets in Dalian and surrounding provinces within 24 hours after unloading. This shows how the new route not only helps reduce costs for producers but also increases access for consumers to fresher, higher quality fruit.
Without doubt, the Fruit Express Line will help tighten the close trade between China and Asean countries while further increasing the development of other businesses along the Southeast Asia route. The expansion of such regional supply chains can also reduce the risk of disruption to more fragile global trade, as we have recently experienced as a result of the coronavirus pandemic.
Moreover, as we have seen with Thailand, the opening up of new modes of transport can have a dramatic effect on a market. Exports of Thai durian to China began to take off when road connectivity between Thailand and China improved, new bridges were built across the Mekong, and fleets of refrigerated trucks were available to transport the fruit.
Potentially we may see the same kind of increase in demand for fruit from Vietnam with the opening up of the new route.
Suwatchai Songwanich is an executive vice-president with Bangkok Bank. For more columns in this series please visit www.bangkokbank.com