Fruit and vegetables to Thailand
(Last updated: 17 Jul 2013)
Trends and opportunities
The market
The Thai fresh produce market is enjoying rapid growth due to high demand from the retail, food service and food manufacturing sectors.
Domestic tropical produce is very popular due to local taste, its accessibility and significantly lower prices when compared to imported produce. However, in recent times changes in climatic conditions and unexpected natural calamities, have seen inconsistent supplies of seasonal domestic produce, creating a wider window of opportunity for imported produce.
Thailand is the region’s food manufacturing hub, catering to both the domestic and international markets. There has been increasing demand for quality raw materials, particularly for export markets which have high food standards.
Imported produce is viewed as a luxury item, but is gaining in popularity due to:
- changes in Thailand’s consumer spending patterns
- increasing tourist numbers and expatriates living in Thailand
- the expanding food service sector
- the rapid growth of modern retailers
Opportunities
Key factors that make fresh produce exports from Australia more competitive than other countries include:
- Australia is seen is a 'clean and green' destination and buyers have expectations that produce from Australia will yield better quality, a longer shelf life and have a better taste
- Greater awareness among Thai consumers regarding food safety issues - Australia is perceived as a quality supply source due to low usage of chemicals in the production process
- Australia’s close proximity to Thailand allows for a short shipment time that maintains the quality and freshness of produce
- The Thailand Australia Free Trade Agreement (TAFTA) gives Australian exports a competitive advantage as import tariffs of produce have either been eliminated to zero percent from the effective date (2005) or will be phased down to zero percent by 2015, whereas produce from other countries without a trade agreement with Thailand is subject to import tariffs of 10 - 42 per cent
Competitive Environment
US produce has been exported and heavily marketed in Thailand for many years, but as buyers gain a greater understanding of the counter seasonality of produce from the northern and southern hemispheres, they are able to make sourcing plans that enable them to have a full year supply of fresh produce sourced from all over the world.
However, for produce items which can be supplied from a single country all year round, factors such as quality, price competitiveness, supply consistency and the buyer/exporter relationship become more important when deciding where to source produce.
China still supplies large volumes of fresh produce to Thailand due to its competitive pricing, but as food safety awareness is becoming an increasingly important factor in purchasing, Chinese produce is being replaced with produce perceived to be 'cleaner and greener'.
Australia also faces strong competition from other southern hemisphere supplying countries, so it is essential to provide support to retailers for promotional activities, to generate awareness of Australian fresh produce and establish it as the leading fresh produce supply among consumers.
Tariffs, Regulations and Customs
Countries that have signed Free Trade Agreements with Thailand can import produce with tariffs at zero percent or have import tariffs phasing down to zero percent, depending on the terms of the agreement.
The Thailand Australia Free Trade Agreement (TAFTA) gives Australian exports a competitive advantage as import tariffs of produce have either been eliminated to zero percent from the effective date (2005) or will be phased down to zero percent by 2015, whereas produce from other countries without a trade agreement with Thailand is subject to import tariffs of 10 - 42 per cent.
For information on import tariffs, please refer to www.dfat.gov.au/fta/tafta/.
Thailand is currently reviewing its import conditions for all horticultural products, including imports from Australia. Commodities that are classified as regulated products are subject to Pest Risk Analysis (PRA) process and import conditions, before being allowed entry into Thailand.
As of July 2013, Thailand formally established import protocols for the following commodities: table grapes, citrus, apples, pears, avocadoes, strawberries, persimmons and kiwi fruit.
Thailand has also terminated access for some fresh fruits such as cherries and summer fruits. The Thai Department of Agriculture is in the process of reviewing protocols to allow these products to be imported.
For further information regarding conditions for existing import protocols, please refer to www.daff.gov.au/micor/plants.
Marketing your products and services
Market entry
Market entry strategies will vary according to products and segments being targeted. Use Australia’s unique advantages by promoting such factors as counter seasonal advantages, Australia’s diverse climate, soil variation, and its established image of a clean and safe environment.
There are a number of strategies that will improve your business dealings with buyers from Thailand:
- Where possible secure local representation through local importers who will take care of your produce and market it on your behalf. Major retailers, however, will usually have a direct import division for purchase of fresh produce and prefer to have direct contact with Australian exporters.
- Establish and maintain business relationships with buyers. Set aside sufficient budget for regular visits to the Thai market to study market trends and meet with key buyers to discuss market expansion plans, supply availability, seasonal advice and any other issues. Buyers appreciate being kept informed so that they can plan accordingly.
- Provide packaging options, suggest new trends.
Distribution Channels
Traditional importers/wholesalers are the main import contacts. Major retailers have begun to set up direct import divisions that source fresh produce worldwide, in addition to a portion of goods purchased from local importers.
Links and industry contacts
Government, business and trade resources for Thailand
Thai Customs – www.customs.go.th
Thai Department of Agriculture - www.doa.go.th/en
Department of Agriculture, Fisheries and Forestry - www.daff.gov.au
Contact details
The Australian Trade Commission – Austrade – is the Australian Government’s trade, investment and education promotion agency.
Through a global network of offices, Austrade assists Australian companies to grow their international business, attracts productive foreign direct investment into Australia and promotes Australia’s education sector internationally.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Email: info@austrade.gov.au
A list of Austrade offices (in alphabetical order of country) is also available.