In 2020, the demand for durians from Asian countries continued to increase in countries such as Macau, Japan, and especially Hong Kong, which increased its imports from USD 227 million to USD 628 million in 2019. Hong Kong's re-exports for fresh durians to China has also expanded to USD 587 million from USD 450 million in the same period.
Thailand Remains the Leader, but Prices Surged Since Last Year
The China-Thailand Free Trade Agreement promotes the export trade of Thai durians with zero tariffs, which has allowed the rapid development of Thai durians in the Chinese market. Durian exports from Thailand escalated quickly to USD 1.5 billion in 2019 from less than USD 500 million in 2016. This was made possible mainly because of the massive increase in demand from Hong Kong, coming from mainland China. According to Thai Customs, in 2020, the value of Thai durian exports to China reached 576,000 tons, worth $ 2.51 billion, down 4.6% in volume, but up 47.6% in value compared to 2019. Direct Chinese imports of Thai durians accounted for USD 1.4 billion alone. The substantial increase in durian export value is due to the high increase in export prices caused by COVID-19 restrictions and decreased supply.
Thailand's total production volume in 2019 reached 795,084 tons, and according to Thailand’s Office of Agricultural Economics, Southern Thailand’s durian output is expected to increase by 22% compared to last year. However, for the current export season to Thailand, adverse weather has delayed production as purchase prices for the Monthong durian variety have been rising steadily.
According to Rata Kirkthanasatit, Tridge´s Engagement Manager in Thailand, the price of durians has gone up by 30%. As the supply of durian is still lower than the demand, the price of Monthong durians remains high at 5.15 USD per kg.
Source: Tridge
Small and large durian prices in the wholesale market in the second week of April 2021 were higher than the prices from 2020. The price of the small durian variety ranged between 2.79 USD per kg to 5.36 USD per kg. The price of the large durian variety had smaller fluctuations in price, between 3.83 USD per kg to 6.07 USD per kg for the same week of April 2020. The nations that were the most impacted by the price change of small and large durians in Thailand include Hong Kong, Germany, Spain, the United States, New Zealand, Switzerland, Macao, the U.K., Japan, and Denmark.
New Malaysian Varieties enter the Chinese market
Malaysia gained approval from the Chinese government in 2019 to export whole frozen durians to China. Since then, the Malaysian durian export volume has rapidly increased. Malaysia’s main trading partners for durians have traditionally been Singapore, Hong Kong, and the US. According to The Royal Thai Consulate-General in China, since October last year, the Malaysian Musan King variety has entered the Chinese marketing channels online and offline to tempt Chinese consumers with prices as low as 0.15 USD per kg. As a result, Malay durian is fast becoming popular in China, with October’s campaign netting sales of 340,000 durians.
According to Hanizah Rasad, Tridge´s Engagement Manager in Malaysia, apart from the Musang King, Malaysia will also add the increasingly popular export variety D24 in China.
Although the D24 is cheaper than the Musang King, it cannot match Musang King's taste. D24 is widely exported in terms of paste and dried for use in cooking. Exports of this variety are expected to increase 25% in 2022 to China.
Over the last five years, the retail price of the Musang King durian has risen by 300% after China began importing whole frozen durians from Malaysia. The price of Malay durians went up from 1.90 USD per kg last year to 9.59 USD per kg this year, with premium varieties such as the Musang King, Ochee, and Sultan sold out.
Significance of the Chinese Market
Durians have become the highest-value imported fruit in the first semester of 2020, with durian imports reaching a total value of USD 1.97 billion between January and August. It is estimated that the trade volume for durians from Thailand, Malaysia, and Indonesia is expected to reach 4.5 million tons by 2030. In 2019, durians were China’s top importing fruit, a total value of USD 1.6 billion, surpassing fresh cherries for the first time. While China currently allows durian shipments only from Thailand and Malaysia, Vietnam and the Philippines are negotiating to gain access to China’s durian market.
The Chinese durian market’s major issues are the diversity of brands, large price differences, significant market fluctuations, and irregular quality levels. There is also little standardization throughout the industry. Because of this, there are still significant opportunities in the market for proper brand establishment. With a strong quality and price differentiation campaign, Malaysian durian varieties will face a battle against well-established Thai varieties to increase their market share in the Chinese market.
Sources:
- Fresh Plaza. ¨Thailand: Durian traders fear for effects of Covid on exports to China.¨
- Fresh Plaza. ¨China slowing durian imports from Thailand.¨
- The Jakarta Post. ¨Thai Monthong faces Malaysia's ‘King’ in battle for China’s durian market.¨
- Producer Report. ¨Durian Market and Production Continue To Grow.¨
