Thailand fruit traders eager for China-Laos Railway
Durian to enjoy lower costs, faster delivery
Published: Sep 26, 2021 08:03 PM
A culture fair promoting Thai food in Kunming,  Southwest China's Yunnan Province on July 7 Photo: IC

A culture fair promoting Thai food in Kunming, Southwest China's Yunnan Province on July 7 Photo: IC

With the China-Laos Railway set to complete its construction by the end of this year, durian growers in Thailand are looking forward to upgraded access to the lucrative Chinese market where Chinese consumers' appetite for Thai durian continues to rise.

The over 400-km railway will run from Boten border gate in northern Laos bordering China to Vientiane with an operating speed of 160 km per hour, according to Xinhua News Agency. Once operating, the railway will set out from Kunming, capital city of Southwest China's Yunnan Province in the morning and arrive at Vientiane by nightfall on the same day. 

The project entered construction in 2016, seeking to link the city of Kunming with Vientiane, as part of wider vision for a pan-Asian railway stretching southward to Singapore.

The multibillion-dollar railway project will greatly benefit Thailand's fruit growing economy with merchants and fruit growers benefitting from opportunities to enter the lucrative Chinese market, home to a middle-class population of 400 million. 

The China-Laos Railway is a great opportunity for all the parties: China, Laos and Thailand, Patchaya Khiaophan, vice president of marketing for the Thai Durian Association, told the Global Times in a statement. 

"Transportation is the key. It is for both time and cost. Durian is fresh fruit so we work against time. Of course, the lower transportation cost is beneficial for every involved party, especially the customers," Khiaophan said. 

In 2020, China imported around 575,000 tons of fresh durian worth 69 billion Thai Baht ($2.08 billion), growth of 78 percent year-on-year, according to media reports, cementing China as Thailand's largest export destination for fresh durian. Thailand is also the largest fruit supplier to China. 

Seeing the growing demand by Chinese consumers, Thailand's durian exports in the first seven months this year reached 37,148 containers, or 668,664 tons, according to the association. 

Competitive price

As the weather in China enters its winter months, most fresh Thai durians are transported by air which usually takes two days, a fruit trader based in Shanghai told the Global Times.

"The price of Thailand durians soared this year, from 600 yuan per box (around 16 kg or five-six durians) to 900 yuan per box due to the popularity of the fruit in China," the trader said. 

However, there are many difficulties of Thailand's durian exports amid the pandemic, according to Khiaophan. 

"The virus containment measures make the transportation slower than expected, including the COVID-19 tests on drivers at the border as well as the tests on carton and product," she added. 

During the harvesting season, exports of durian, mangosteen and other fruits also created transport congestion at the border, she said. 

"So, the China-Laos Railway is the best solution. Once it is open, we hope that the transportation will be better with competitive price. Then, the railway will be the main mode of transport of fruits in the future," Khiaophan noted. 

At present, fruit from Thailand come from Laos to Boten port and from there is moved on to big cities across China, Wei Lin, who sells Thai durians in Yunnan told the Global Times. 

"It is expected that the transport costs and time will be greatly reduced once the China-Laos Railway is opened," Wei said. 

Challenges ahead

Thai durian producers have urged the creation of a rail link with China to ease the bottleneck that's strangling durian exports, according to July report by Asia News Network. 

The report cited Thai Durian Association chairman Phanusak Saiphanich, saying "there is currently no connection between the Thai rail network and the Laos-China link." He urged the government to reach an agreement with Laos on linking the rail routes.

Nowadays, the bottleneck problem is being addressed by many parties, said Khiaophan. "Good news is Nongkhai Plant Quarantine Station is just opened so the congestion will ease, hopefully."

"Another big concern is the weight limitation of Thai-Lao Friendship bridge. We have raised that the problem should be solved soon, including the facility at the dry port should have well prepared, the container yard management system, one stop custom system, electricity, water system and warehouse," she noted, adding the association had a chance to have a conference with Vientian Logistics Park which drive the project and they said everything will be prepared and ready for the next harvesting season in 2022.

Looking further ahead, custom clearance and cold chain supporting facilities remain two major issues for Thailand's durian exports to China, Yu Linlin, president of the Thai Jinlin Trade Association, told the Global Times. "If solved, the majority of Thailand fruits will be transported by rail."