In northern Thailand, the longan fruit, known locally as "lamyai," has become a focal point of international trade dynamics. The fruit's success in the Chinese market is shadowed by complexities and challenges that could affect the future sustainability of Thailand's longan exports. In 2023, Thailand shipped 327,296 tons of longan to China, making up 95% of China's imports of the fruit, a figure that underscores Thailand's dependency on the Chinese market.
Niwat Kantawong, a dried longan exporter from Chiang Mai, described the close oversight by Chinese buyers, saying, "It's as if they're controlling the production themselves." This situation has led to a power imbalance, with Chinese buyers setting prices and quality standards, leaving Thai farmers with little leverage. The Ministry of Commerce reported that in 2023, Thailand's global longan exports reached 16.5 billion baht, with China being the largest market, accounting for 78% of the total exports.
The International Institute for Trade and Development indicated that China's fruit imports have been on the rise, with ASEAN countries being key suppliers. For 2024, Thailand's longan production is projected to increase by 2%, with northern provinces like Chiang Mai and Lamphun being major contributors. Deputy Prime Minister Phumtham Wechayachai emphasized the government's commitment to addressing agricultural issues and the importance of maintaining high-quality produce to remain competitive, especially against rising competitors like Cambodia.
Chawanwit Jaikard, a longan farmer from Lamphun, highlighted the influence of Chinese capital in the market, stating, "The prices are set the same whether it's a Thai or Chinese Lhong." This dominance by Chinese middlemen creates uncertainty for farmers, affecting their ability to cover production costs and potentially leading to financial losses.
Research by Li Jun Wang from Chiang Mai University and insights from Donlawat Sunsuk, a researcher at The Glocal, suggest that the industry needs to diversify processing methods and explore markets beyond China to mitigate risks associated with market monopolization and changing consumer demographics. A proposed "Longan Strategy Act" aims to address these issues by establishing a committee to negotiate new markets and develop value-added longan products.
Niwat advocates for innovation in processing methods, suggesting the exploration of longan-based spirits, beer, or wine to reduce dependence on the Chinese market.
Source: RFA