The Thai government is considering a new export duty on durians, a move that could increase fruit prices in China, the world’s largest consumer of the tropical crop. The proposal, outlined in a draft bill last month, aims to establish a fund to support research and sustainable development within Thailand’s durian sector.

The government’s plan would impose fees on durian exports, with some reports estimating the levy at around 2 baht (approximately 5 US cents) per kilogram. This additional cost could be transferred through the supply chain, potentially resulting in higher prices for Chinese supermarkets and consumers, analysts say.

China accounts for over 90% of global durian consumption, underscoring the country’s importance to Thailand’s durian export market. Thai durian shipments to China reached approximately US$5 billion in the first eight months of 2023, surpassing the total export value for all of 2022, according to Chinese customs data.

Experts suggest the levy could impact prices but might also lead to improvements in fruit quality. “Some exporters may absorb part of it, but eventually some of the cost could be passed on to buyers and consumers in China,” said Lim Chin Khee, an adviser to the Durian Academy in Malaysia. He added that if the revenue collected is invested in quality enhancement and sector improvements, consumers might see tangible benefits.

The proposed fund is intended to address industry-wide needs such as quality control, traceability, research, pest management, and protection of the Thai durian brand, noted Thitinan Pongsudhirak, a professor of international relations at Chulalongkorn University. He cautioned, however, that without effective implementation, the levy could become an additional financial burden rather than a tool for sectoral advancement.

Thailand faces competition in the durian market, particularly from Vietnam. Vietnamese exporters experienced setbacks last year when Chinese inspections detected excessive levels of harmful substances in some shipments. Price volatility remains a factor in the market, with buyers potentially shifting to alternative sources if Thai prices rise significantly.

The proposed levy has met resistance from domestic stakeholders. The Thai Durian Association and the Thai Fruit Traders and Exporters Association have opposed the duty, citing concerns over increased costs and skepticism that exporters would absorb the fee. The government has yet to announce a timeline for the levy’s introduction.

Questions also remain about how the cost will be distributed within Thailand’s supply chain. According to Thitinan, while exporters would initially bear the levy, farmers could face reduced prices for their crops as the additional expense filters back to the primary producers.