Bangkok Blues

As I write this, the streets of Bangkok are aflame, with burning tires and ignited passions. Across the smoking city center, eerily devoid of traffic, running battles – the protestors’ grenades and slingshots versus the army’s rifles and rubber bullets – are claiming victims almost continuously.

I don’t wish to sound as though I am reporting from the front line: in fact, my home is situated some distance from Bangkok’s central district, near the new airport, and life here goes on as if there were no problems: a veritable tropical suburbia with easy access to supermarkets and department stores, fresh markets and noodle stands. The recent stiflingly hot weather is starting to show signs of cooling down now as the rainy season approaches and the skies are becoming cloudier as the sound of distant thunder rumbles provocatively through the moist air.

There are no red, yellow or military shirts anywhere near here at present.

Our office, on the other hand, is at one corner of the current no-go area, so Somjait, or Nong as we know him, Glenn and I are working from home until the crisis plays out and we can safely return to our place of work.

Obviously, this is not an ideal situation, for us or for thousands of other businesses, large and small, across Bangkok.

The inevitable economic consequences that this ongoing political and social unrest will ultimately create for the people of Thailand will in part come to rest on the shoulders of coffee and tea farmers in the South and North of the country.

Thailand is the third largest producer of coffee in Southeast Asia. Much of its production (primarily robusta) is snapped up by instant coffee manufacturers. Robusta growers have had little difficulty selling what they produce. Quality has not been too much of an issue as there has, up to now, been a ready domestic market in this hitherto highly protected market.

A similar paradigm has marked arabica production. While much of Thailand’s arabica crop is not widely regarded as being particularly excellent (although there are certainly some very good coffee beans being produced and processed in the kingdom), there has been enough domestic demand to ensure that what is grown is typically sold, to instant coffee manufacturers, to domestic retail outlets and to local coffee shops (whose prices are typically half or less than those of international coffee shop chains). Currently, only a small percentage of Thai arabica is exported.

Thailand’s coffee industry has for many years been sheltered from the realities of global coffee price fluctuations. As a consequence, the drive to increase productivity, quality and added value to the crop has been tempered through protectionist measures that were introduced years ago. Now that the import duties for coffee are coming down in line with free trade agreements, what coffee farmers most need to do is to invest in GAP and improving quality and yield to compete with the nation’s coffee-producing neighbors Vietnam and Indonesia, not to mention India. An increased financial burden on Thailand’s small growers at this juncture could stifle the opportunities shedding decades of punitive import duties present for improving the domestic crop to make it more competitive internationally.

There are new, uncertain realities on the horizon for Thailand. The same may sadly also hold true for its coffee growers.

Heneage Mitchell
Managing Editor/Co-publisher