Concerns that costs could be passed on to consumers in China as proposed legislation undergoes consultation
The potential ramifications of Thailand’s proposed durian act have been raised as the government and key stakeholders continue to discuss legislation designed to help regulate the country’s durian industry.
The draft act, currently under consultation, addresses issues including quality standards, enforcement, and industry development. One proposed measure is the establishment of an export levy to fund research and sustainable development for Thailand’s durian industry.
According to a report from The South China Morning Post (SMCP), the export levy could be as high as 2Bt (US$0.06), a figure analysts have said may be passed onto consumers in international markets.
“I think there will be some impact on prices because somebody along the supply chain has to bear the additional cost,” said Lim Chin Khee, an adviser to the Durian Academy, a Malaysian institution that trains growers, told SMCP.
“Some exporters may absorb part of it, but eventually some of the cost could be passed on to buyers and consumers in China.”
Thitinan Pongsudhirak, a professor of international relations at Chulalongkorn University in Bangkok, said Thailand’s durian industry needed investment to manage issues including quality, traceability, pests, and maintaining the reputation of the Thai durian “brand”.
“Thailand’s proposed durian levy is intended to offset things the industry needs collectively,” Pongsudhirak said.
“But if it does not achieve these aims, the levy risks becoming just another cost imposed on a successful export sector.”
The Thai Durian Association and the Thai Fruit Traders and Exporters Association have opposed the proposed duty as a financial burden and have said exporters were unlikely to absorb the cost, according to local media reports.
However, as recently as mid-September, the Thai Durian Association has cautioned against anticipating the final form of any legislation. It noted that details are currently under review, refinement, and amendment, and the groups working on the legislation are fully committed to ensuring the draft is comprehensive.
