THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Vluntary - Public Date: 11/30/2011 GAIN Reprt Number: TH1151 Thailand Pst: Bangkk Fresh Fruits Reprt Reprt Categries: Fresh Fruit Apprved By: Prepared By: Srisuman Ngamprasertkit, Agricultural Marketing Specialist Reprt Highlights: TH1151 - Thailand prduces a wealth f trpical fruits, hwever the cuntry has shwn a great appetite fr imprted fruits, especially deciduus fruits. Exprts f fresh prduce frm the wrld t Thailand have increased significantly in the last five years frm US$102.2 millin in 2005 t US$287.6 millin in 2010 r a 181 percent increase in five years. Tp U.S. fruit exprts t Thailand are apples, grapes, cherries, ther stne fruits and berries. Nnetheless, U.S. fresh fruits face increasing challenges as majr cmpetitrs have mre favrable terms f trade due t their trade arrangements with Thailand.
General Infrmatin: Overview: Thailand prduces a wealth f trpical fruits, hwever the cuntry has shwn a great appetite fr imprted fruits, especially deciduus fruits. This is clearly illustrated as exprts f fresh prduce frm the wrld t Thailand have increased significantly in the last five years frm US$102.2 millin in 2005 t US$287.6 millin in 2010 r a 181 percent increase in five years (Table 2). China and the USA have dminated this trade as they have been the majr suppliers f fresh fruits t Thailand. Tp U.S. fruit exprts t Thailand are apples, grapes, cherries, ther stne fruits and berries (Figures 1,2,3,4, and 5). The main driving frce behind an increase in imprts was a steady expansin in the cnsumptin f fresh fruits as incmes have risen accrdingly frm a per capita f $5,568 t $8,700 r 56 percent in the same perid. [1] Althugh imprts f fresh fruits frm United States have increased by a slid 86 percent during the perid 2005-2010, frm US$18.8 millin t US$34.9 millin, its market share has drpped frm18 percent t 12 percent while China s has increased frm 60 percent t 64 percent, New Zealand s frm 2 percent t 8 percent and Australia s has remained at a cnstant 5 percent. This trend des nt cme as a surprise as these cuntries have cncluded free trade arrangements with Thailand and as such enjy much mre favrable terms f trade due t detarifficatin (Table 1). In light f this, it behves the U.S. fruit industry that cperatrs remain actively engaged in the Thai market as the New Zealanders, Australians and market newcmers such as Peru and Chile which are als entering int trade arrangements, are aggressively curting the Thai cnsumer. The latter is nticeable by the increase in these cuntries number f supermarket displays and prmtins, and their active participatin in all types f trade shws in the HRI sectr. [1] CIA Wrld Factbk 2005 and 2010.
Table 1: Tariff cmparisn f selected fruits between the US and majr cmpetitrs under Free Trade Agreement
Table 2: Value f fresh fruits imprts frm selected cuntries int Thailand Figure 1: Imprts and market share f fresh fruits int Thailand frm majr destinatins
Apple Overview: Currently, tw trade prmtinal grup representing U.S. fresh fruits are based in Thailand: 1) PT&Tatch fr Nrthwest Cherries Grwers and 2) AT Success Marketing fr the Washingtn State Apple Cmmissin and the Califrnia Table Grapes Cmmissin. AT Success Marketing prmtes Washingtn Apple and Califrnia Grapes, Washingtn State apples recrded the highest vlume and value f the ttal imprted apples t Thailand in the last year, despite the fact that U.S. apples market share has drpped due t uncmpetitive prices cmpared t Chinese and New Zealand apples, which enter tariff free cmpared t U.S. apples tariff rate f 10 percent. In the perid f 2005-2010, verall market share fr U.S. apples has decreased frm 18 percent t 13 percent, althugh sales increased frm $9,304,540 t $16,386,947 (Figure 1). The mst ppular apple varieties in Thailand are Red Delicius which accunt fr 62 percent f variety share, fllwed by Gala with 21 percent and Granny Smith 8 percent. Figure 2: Imprts and market share f apples int Thailand frm majr destinatins
Grape Overview: Frm 2005-2010, Califrnia grapes exprt value has increased every year, driven by strng cnsumer demand especially tward seedless varieties. Same as apples, Califrnia grapes recrded the highest vlume and value f the ttal imprted grapes t Thailand in the last year, despite the fact that recently the U.S. market share fr grapes has drpped due t uncmpetitive price cmpared t Chinese, Australia, Chilean and Indian grapes, which enjy much lwer tariff rates than the U.S. In this perid verall market share fr Chinese grapes have increased frm 8 percent t 50 percent, Chile and India have seen increases f 5 percent but Califrnia s decreased frm 47 percent t 22 percent, althugh sales increased frm $8,357,758 t $11,925,312 (Figure 2). Ppular Califrnia grapes varieties in Thailand are Crimsn Seedless, Autumn King, Flame Seedless, Scarlet Ryal, Ruby Seedless, Sugarnineteen, Thmpsn Seedless, Princess and the seeded variety Red Glbe. Thai cnsumers shifted their tp preference frm the seeded variety Red Glbe t seedless varieties such as Crimsn Seedless and Flame Seedless due t the seedless quality but als due t taste, price, and lnger shelf-life. Figure 3: Imprts and market share f grapes int Thailand frm majr destinatins
Cherries Overview: PT&Tatch prmtes Nrthwest Cherries in Thailand and cherry varieties that are sld in Thailand are Bing, Chelan, Rainier, Skeena, Sweetheart, and Tietn. Dark red cherries market share is 90 percent and 10 percent is Rainier. U.S. exprts f cherries t Thailand have skyrcketed in the last five years frm US$199,364 in 2005 t US$2,287,096 in 2010 and its market share has increased frm 24 percent t 36 percent in the same perid (Figure 3). This is a remarkable achievement as U.S. cherries have been classified as a luxury prduct by the Thai gvernment which has a 40 percent tariff rate cmpared t cuntries that have trade arrangements such as Australia, New Zealand and China which enjy 0 tariff rates. Nrthwest Cherries has dne a fabulus jb branding U.S. cherries as these are the mst recgnized and well-knwn cherries amngst imprters and cnsumers in terms f quality, cnsistent supply and cmpetitive pricing. In additin, Nrthwest Cherries have been successful in taking aim at its key cnsumer base by wrking with retail utlets targeting middle and upper incme earners that are able t put quality abve pricing. Figure 4: Imprts and market share f cherries int Thailand frm majr destinatins
Summer Fruits Overview: Frm 2005 t 2010, U.S. market share f summer fruits t Thailand has decreased frm 48 percent t 27 percent fr plums & sles and frm 19 percent t 8 percent fr peaches & nectarines althugh sales increased frm $99,646 t $163,180 and $51,160 t $100,433, respectively (Figure 4). In the past, Califrnia Summer Fruits, a cperatr grup used t have marketing activities such as prduct knwledge training at the prduce departments f majr retailers, and they als had n- spt cnsultants t answer and prvide brchures t cnsumers abut the prducts and tips n hw t best handle them. Unfrtunately these activities ceased in 2007 which has resulted in a decreasing market share alng with exprt vlumes and sales. Part f this prblem can be attributed t the new prduce staff lack f knwledge f these prducts and their prper handling and display. As a result, retailers have reduced their stcks f these prducts and are available nly at upper-end supermarkets and fresh markets. In additin t the lack f cperatr activities, tariff disadvantages have affected ptential market pprtunities fr these prducts. Since 2005, the Australians have increased sales f plums and sles by 380 percent and the US nly by 64 percent, and Australian sales f peaches and nectarines have increased by 1034 percent while U.S. sales have increased 96 percent. Figure 5: Imprts and market share f plums & sles/peaches & nectarines int Thailand frm majr destinatins Berries Overviews:
Berries include strawberries, raspberries, blackberries, mulberries, etc shws an increasing exprt t Thailand year by year. Driscll s berries packages are available in medium- and high end supermarkets thrughut Thailand. In last five years U.S. exprts f berries fruits t Thailand have increase frm US$ 16,935 in 2005 t US$ 1,062,022 in 2010, and its market share frm 5 percent t 31 percent in this perid (Figure 5). Althugh U.S. ranks as the number ne U.S. berries exprter t Thailand, it faces a big cnstraint f a high tariff rate f 40 percent cmpared t ther cmpetitrs such as Australia, New Zealand, Krea and China at 0 percent. Hwever, retailers have stated their preference f U.S. berries due t their size and quality. Figure 6: Imprts and market share f berries int Thailand frm majr destinatins Cnstraints: High imprt tariff n U.S. fresh fruits (30-40 percent) remains a key barrier fr fruits market access int Thailand cmpared t cmpetitrs e.g. China, New Zealand and Australia. Imprters have difficulty finding supplies f U.S. fresh fruits during the early seasn. Cntinuity, cnsistency and quantity f supply are critical fr the new imprters r retailers wh make direct rders. Prduce staff are highly mbile, as they are frequently rtated t ther sectins r leave their jbs. Therefre, there is a need t deal with a changing wrkfrce n a cnstant basis t ensure they ve gt the basic knwledge f imprted fresh fruits and their display, cld rm/cleaning and sanitatin, care and handling requirements.
Majrity f Thai cnsumers are nt familiar with the sweet juicy taste, the crunchiness texture and clr f U.S. fresh fruits especially Califrnia grapes, limiting cnsumer purchases f additinal varieties. Opprtunities: Innvative merchandizing displays and in-stre prmtinal activities t let cnsumers sample and taste U.S. fresh fruits especially during the peak perid f cmpetitrs prducts such as Chinese grapes frm August thrugh Octber. This wuld enable cnsumers t distinguish between prducts. Highlighting U.S. fresh fruits as superir quality and differentiate frm the cmpetitrs as value premium quality fruits. Educating the retailers staff at the stre level by cnducting seminar and prduct knwledge training t acquire the prper handling skills t prlng the fruits shelf-life, leading t an increase in the retailer s prfitability. Retailers still prefer seminars n fruit handling, pst harvest, and up-t-date techniques t keep prduce fresh. Trends: Althugh U.S. fruit sales in Thailand have increased significantly since 2005 by 181 percent, it has lst verall market share frm 18 t 12 percent in the same perid especially t majr cmpetitrs that have trade agreements with Thailand such as China, New Zealand and Australia. It is interesting t nte that the prducts that have cnsistently increased their sales year after year are thse that have cperatr activities in Thailand such as U.S. apples, grapes, and cherries. Cherries and berries are the nly prducts that have increased their market share in the perid f 2005-2010. Cnclusins: U.S. fruits are lsing market share t key cmpetitrs that enjy market share such as the Australians, Chinese and New Zealanders, as such it is imperative that the US engage the Thai s in sme srt f trade arrangement t avid further market share ersin. Cperatr activity and prmtinal events have been key in increasing sales f U.S. fresh fruits inthailand. Lack f cperatr activity has resulted in decreased sales. Althugh berries and cherries have increased their market share cnsiderably since 2005, this situatin is unlikely t remain as Australian and New Zealand berries started enjying a 0 percent tariff rate since 2010 cmpared t the U.S. 40 percent tariff rate. This tariff advantage was nticeable fr berries as market share decreased frm 40 t 30 percent frm 2009 t 2010. End Reprt.