China takes over Thai fruit and vegetable industry
Chinese traders have gained control of the fresh fruit
and vegetable segments of the Thai agriculture industry – negatively
affecting the quality of produce shipped into Vietnam.
Experts at the Vietnam Fruit and Vegetables Association
(Vinafruit) also say there are legitimate concerns that Chinese domination of
these segments of the market pose a serious threat to the nation’s economic
Nguyen Van Ky, secretary general of Vinafruit,
citing a study conducted by Thailand’s Pesticide Alert Network, said that out
of 138 samples of produce in three major Thai growing regions, 46.6% were
found to contain unsafe insecticide and pesticide residue levels.
In addition, Mr Ky said more than half of the fruit and
vegetables of Thailand that were awarded the ‘Q mark’ for quality by the
National Bureau of Agricultural Commodity and Food Standards, were found to
have harmful residue levels.
In addition, 25% of the fruit and vegetables tested that
had been certified as being organic (and supposedly free of chemicals), were
found to contain residues exceeding accepted standards.
All orange, guava
and red samples failed the tests; so did 71.4% of dragon fruit samples; 66.7%
of papaya, basil and long beans; 44.6% of nam dokmai mangoes; 22% of
water spinach; and 11% of tomatoes and cucumbers.
Only cabbage and watermelon samples were found to be
free of harmful residues.
To compound the problem, Mr Ky said many Chinese
traders are now circumventing normal trading policies and procedures and
negotiating directly with Thai and Vietnamese farmers and other actors in the
These informal cross-border trading procedures have
become particularly common in the Thailand provinces of Chumphon,
Chanthaburi, Rayong and Trat, said Secretary General Ky, and give Chinese
traders unfettered access to the Vietnamese market.
Hoang Trung, from the Ministry of Agriculture and Rural
Development, said most of the Thai fruit and vegetables that are shipped into
Vietnam through official channels, meet with acceptable standards for food
It’s the produce coming through the informal market that
should give all consumers pause for concern, said Mr Trung.
Chinese threat to
control market prices
Chinese traders have for years bought produce from Thai
farmers for export using futures contracts, said Vinafruit Secretary
In other words, Thai farmers sell their produce for
future delivery to Chinese buyers prior to harvest as a hedge should cash
This creates the scenario, where the Chinese traders
collectively have the potential to control the prices of all fruit and
vegetables exported to Vietnam via their ability to perform (or failure to
perform) on their futures contracts.
There already have been numerous reports of futures
contract disputes involving situations where Chinese traders have refused to
buy all the produce at the agreed upon amount forcing Thai farmers to reduce
Thai fruit and
vegetables dominate domestic market
Secretary General Ky, said it’s hard to get an accurate
figure on the total value of fruit and vegetable imports into Vietnam because
so much of the trading is done on the informal market.
However, he said, the reported import value of Thai
produce was about US$60 million in the first three months of 2016, which
shows the impact on the nation’s food supply and economy is huge.
Vo Mai, former deputy chairwoman of
the Vietnam Gardening Association, in turn has expressed concern over
the fact that Thai produce now dominates the shelves of the Big C supermarket
The Big C retail chain is one of the largest supermarket
chains in the country and the Chinese takeover of the Thai fruit and
vegetable segments clearly poses a threat to not only the food supply, but
the nation’s economic security, said Ms Mai.
Lastly, Nguyen Van Ngai, head of
the Economics Faculty of the Ho Chi Minh
City University of Agriculture and Forestry, said Vietnamese
consumers should be wary of all Thai produce.
He suggests Vietnamese authorities institute strict
measures to ensure the safety of produce shipped into the country,
particularly that via informal cross-border trade with Thailand.
He also proposes that the government implement measures
to counter China’s takeover of the Thai fruit and vegetable segments of
agriculture as it could become dangerous if China chose to control produce
prices in Vietnam.