After a spectacular surge in Thai durian exports to China, driven by the Laos-China Railway’s opening, concerns loom over future trade prospects due to a slowdown in the Chinese economy and the disruptive effects of the El Nino weather pattern on Southeast Asia.
Thai durian, famous for its distinctive flavor and aroma, has become a significant export commodity, nearly rivaling rice in terms of revenue for the country.
The Laos-China Railway, operational since December 2021, played a pivotal role in boosting exports by cutting delivery times to China from two days to just 15 hours. Arada Fuangtong, deputy director-general of the Thai Commerce Ministry’s international trade promotion department, emphasized the transformative impact of the railway, which quickly increased Thai durian exports since last year.
However, China’s economic slowdown has now raised concerns about the demand for Thai durian, which has seen impressive growth in exports in the past. Furthermore, the impending El Nino could also threaten durian production in Southeast Asia due to dry weather, potentially impacting both supply and exports.
Thai durian exports to China have witnessed a recent surge, with 446,152 metric tonnes shipped between January and May this year, up by 58 percent compared to the same period last year. Overall durian shipments reached approximately 700,000 tonnes in 2022, with 90 percent destined for China.
The economic slowdown in China and the El Nino threat have prompted durian producers and traders to worry about supply and demand as some Chinese importers have paused their orders. Dry weather linked to El Nino could also lead to a drop in durian production, potentially causing shortages. On top of that, there are quality concerns as well, as evidenced by the rejection of 29 containers of Thai durians by Chinese customs authorities due to spoilage caused by yellow peach moths.
Ms. Arada said that recognizing the importance of the China-Laos Railway and the potential opportunities it offers, her department has encouraged Thai exporters, especially fruits and vegetables sellers, to consider shifting to rail transport, given the rising cost of road transportation due to relatively high oil prices. Less travel time on the railway also ensures that perishable products remain fresh while reaching their destination.
While Thailand plans to expand its high-speed rail network, offering faster transportation options to China, the Commerce Ministry has not revised its forecasts for Thai durian exports to China in light of the prevailing uncertainties.
