Recently, we have seen the movement of foreign capital investment in and out of the country as well as throughout the Asian region. These investment activities may directly and indirectly affect the economic structure of our home.
One of the top agricultural products in Thailand when it comes to the subject for export is nothing but durian. Recently, we have seen the continual rise of durian prices in the country despite the fact that they are domestic products. Suddenly, durian has become less affordable. This is because Thai durian farm operators have their head turn to the bigger market with much higher demand and spending power – China.
However, things might change in the future with the current competition from countries in the same region such as Malaysia and the Philippines as well as certain future competitors – Laos. This may force durian agricultural operators and exporters seeking a new strategy to cope with the rise in competition, as a result, affects the durian price domestically.
This brings us to today’s hot topic of discussion recently. Thansettakij source has revealed regarding chinese investors receiving 30,000 acres of land as concessions from the Laos government for one particular purpose – cultivate durians for export to China. This is viewed by the Laos government as a move which could promote entrepeneurialship and the agricultural sector for export to foreign countries. This could create thousands more jobs as well as generate income for people in a country which have seen more goods coming in and out.
We have witnessed the continued growth of the durian import business in China which creates business opportunities. Hence, there is a high probability that Thailand will be facing escalating competition in Southeast Asia sooner than later when this land concession plan of 20,000 – 30,000 rai takes shape. With a terrain and geography that is similar to Thailand but much cheaper labor cost, Laos could pose a considerable threat to the Thai’s durian exporting business.
Another thing that gives Laos a clear advantage is the current Free Trade Agreement in place which waives any import tariffs between Laos and several trading countries, including China, the largest consumer market. This could finally give the country a leverage in developing its agricultural industry in the future.
Before carrying out an investment of this magnitude, an in-depth study of the project feasibility must be performed in order to ensure the intended outcome. These studies include an analysis of the project location and site selection.
With the increasing demand of land for agricultural purposes, land prices could rise depending on locations. Therefore, land holders or one intending to acquire one for agriculture should keep a close watch on the values before any transaction. Prospec Appraisal is happy to provide services and consultations for land valuation or even business valuation for owners. Moreover, we also offer additional service on feasibility study and site selection.