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China's takeover of Thai fruit industry

Farmers working in a fruit orchard growing longan.

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Chinese traders now control most fruit shipments to China raising fears of future market dominance & control.

AGRICULTURAL & FOREIGN BUSINESS

China's takeover of Thai fruit industry

10/02/2016
Phusadee Arunmas

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.

In response to this trend, the government is set to tighten controls on fruit trading.

SHORT TERM GAINS, LONG-TERM DANGERS

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.

The ministry will also propose that the Central Commission on Prices of Goods and Services include wheat, longan, mangosteen and durian on the government’s price control list.

MEASURES TO ENSURE FAIR TREATMENT OF FARMERS

Chinese traders have for years bought fruit for export using futures 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.

It has been proposed that the government supervise purchase contracts to ensure fair treatment for farmers and that the government prepare a database of fruit traders in each province based on types of fruits and nationality of the traders.

If the fruit market is dominated by a single country, China, this could become dangerous if China later refuses to make purchases.

http://www.bangkokpost.com/business/news/857736/fruit-brokers-raise-chinese-concerns

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Vocabulary:

based on (verb): information or facts used to make a story, calculation, judgement or decision - ตั้งอยู่บน,ยึดเป็นหลัก

benefit : to get help or an advantage from something - ผลประโยชน์

breach (noun): a failure to follow a law or rule - การละเมิดกฎหมาย, การละเมิดกฎข้อบังคับ

broker : a person or company who arranges something such as a deal, agreement, a job, etc. - นายหน้า

case : a particular situation or a situation of a particular type - กรณี, เหตุการณ์, สถานการณ์

Commerce Ministry : the Thai government ministry focusing on internal and external tarde, ensuring free and fair trade and protecting consumers - กระทรวงพาณิชย์

competition : a situation in which people or organizations compete, i.e., try to be more successful or better than somebody else who is trying to do the same as you - การแข่งขัน

contract : an official written agreement - สัญญา

control (noun): control and authority over a situation or a group of people - อำนาจบังคับบัญชา, ตำแหน่งบัญชาการ

database : a large amount of information stored in a computer in an organised way - ฐานข้อมูล

deal (noun): a formal agreement, especially in business or politics - ข้อตกลง, การตกลงซื้อขาย, การซื้อขาย

dealing with : taking appropriate action in a particular situation or according to who you are talking to, managing, etc. - รับมือ

directly (adv): in a direct line or manner; immediately - โดยตรง, ทันที

dominate : to be in control - มีอำนาจเหนือ ครอบคลุม ควบคุม

dominated : controlled - ถูกควบคุม  ถูกชักใย บงการ

effect : a change that somebody/something causes in somebody/something else; a result - ผลกระทบ

ensure : to make certain that something happens or is done - ให้การยืนยัน, รับรอง, ให้ความมั่นใจ

entry : the act of taking part in a competition, race, etc - การเข้าแข่งขัน

eventually : at the end of a period of time or at the end of a process - ในที่สุด

expand : to make or become larger (noun form: expansion) - ทำให้กว้าง, ทำให้ขยาย

expert : someone who has a particular skill or who knows a lot about a particular subject - ผู้เชี่ยวชาญ

export (noun): something sold and transported to another country - สินค้าออก

fair : acceptable and appropriate in a particular situation - เท่าเทียม, ยุติธรรม

favourite (adj): something/someone you like the best of all similar things - ที่ชอบมากที่สุด, ที่โปรดปราน, ของโปรด

futures contract : a contract to buy or sell an amount of something at some date in the future for a certain price (for a commodity such as rice or oil) - สัญญาซื้อขายล่วงหน้า

handling (noun): the management of goods and cargo while they are being sent from one place to another -

import : to buy or bring in products from another country - นำเข้า

in response to : in reaction to something that has happened or been said - ตาม

industry : the people and activities involved in producing a particular thing, or in providing a particular service; the production of goods from raw materials, especially in factories - อุตสาหกรรม

local : in or related to the area that you live, or to the particular area that you are talking about - ท้องถิ่น

long-term : that will last or have an effect over a long period of time - ระยะยาว

make up (verb): to be part of something, to consist of - Chinese make up 50% of the city's residents

middlemen (noun): buyers and sellers (traders) of goods between producer and final customer; agents - พ่อค้าคนกลาง,

ministry : a government department that has a particular area of responsibility - กระทรวง

nationality : a group of people who have the same race, language, or culture - สัญชาติ

negative : bad - ที่เป็นด้านลบ

negotiate : to try to reach an agreement by discussing something in a formal way - เจรจาต่อรอง

orchard : an area of land where fruit trees are grown - สวนหรือแปลงผลไม้

particularly : especially, or more than usual - โดยเฉพาะ

practice : a way of doing something - การปฏิบัติ

propose : to suggest an idea for a group to consider - เสนอ

province : one of many divisions of the government of a country into smaller parts - จังหวัด

purchase : to buy something - ซื้อ

quality : the standard of something when it is compared to other things like it; how good or bad something is - คุณภาพ

refuse (verb): to say or show that you will not do something; to say or show that you will not do something that someone has asked you to do - ปฏิเสธ

register : to put your name and other information on an official list in order to be allowed to do something, e.g., vote, study, stay in a hotel etc - ลงทะเบียน

roughly : approximately but not exactly - โดยประมาณ, อย่างคร่าวๆ

set to : ready to do something - พร้อม

shipment : a load of goods that are sent from one place to another - ปริมาณสินค้าที่ขนส่งในครั้งหนึ่ง ๆ

source : someone who gives information - แหล่งข่าว

standardise : to make objects or activities of the same type have the same features or qualities; to make something standard - วางมาตรฐาน, ปรับเข้ามาตรฐาน

supervise : to be in charge of an activity and to check that everything is being done correctly - ดูแล ควบคุม

tighten (verb): to make something tighter, more fixed and secure or stricter - ทำให้แน่น, ทำให้เข้มงวดยิ่งขึ้น, ทำให้แน่นหรือตึงขึ้น, ผูกให้แน่น,

trader : someone who buys and sells things - ผู้ค้า

treatment : a way of behaving towards or dealing with a person or thing - การปฏิบัติ

trend : a gradual change or development that produces a particular result   - ทิศทาง แนวโน้ม

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