Thai Durian to Face Challenges in 2022 Amidst Increasing Demand in China

Published 2022년 1월 17일

Thailand supplied USD 2.1 billion out of USD 2.8 billion durian exports in the world in 2020, and data shows that exports have been growing in size every year. However, the increase in export value in 2020 was driven by increases in price. The quantity of durians exported from Thailand decreased 2019/2020 from 655,346 tons to 620,889 tons. Approximately 444,444 tons of Thai durian were shipped to China. As covid-19 infections are increasing rapidly in Thailand due to the omicron variant in cities farming durian, it will be a challenge for Thai farmers struggle to find labor to harvest the fruit as the durian harvesting season approaches in March 2022.

Durian is often called the "king of fruits," known for its large size, pungent odor, and spiky shape. There are about nine different species of durian that are edible and are cultivated mainly in Thailand, Malaysia, the Philippines, and Indonesia. The demand for durian, a tropical fruit, has increased substantially from 2016 to 2020. The fruit export grew in value by 178 percent, from USD 1 billion to USD 2.8 billion in 2016 to 2020. The Chinese presence in the durian market is strong, taking up 80 percent of the total durian imports in 2020, and data shows that the Chinese demand for durian will continue to grow in the future.

Although the fruit experienced an increase in exported value from USD 2.2 billion to USD 2.8 billion in 2019/2020, the shipped quantity decreased 137,917 tons, from 1,051,628 tons to 913,713 tons. Instead, the unit price increased 43.78 percent, from USD 2,114/ton to USD 3,040/ton, becoming a decisive factor contributing to the increase in export value.

Thailand is the 9th largest supplier of exported fruits in 2020, supplying USD 2.1 billion of USD 2.8 billion durian exports, which composed 76 percent of durian exports in 2020. Thailand has emerged as the leading supplier of durian, increasing its market share for fresh durian from 50 percent in 2016, as the demand for the fruit increased. Furthermore, of the USD 4.2 billion fruit and nuts exports in 2020 (HS Code 08), USD 2.1 billion was durian (HS Code 081060). However, due to the global pandemic that started in 2020, the country faces restraints on every part of the supply chain, from labor shortages to delays and price spikes in logistics. The disruption resulted in a decreased volume, but the export value increased as the prices rose faster. Therefore, the supply of durian remains unrivaled to the increasing demand for the fruit.

The covid-19 pandemic that began in 2020 had minimal effects on Thai agricultural exports. Still, as there are significant waves of infections in the country, durian farmers are worried about possible suspensions in exports to China. In May 2021, Thai durian exported USD 934.9 million, an increase of 95.3 percent YoY. Thai durian depends heavily on the Chinese market, as China dominates the durian export market, and potential bans on Thai durian will have devastating consequences on Thai durian exports and the overall fruit exports. To adjust to potential dangers in exports, Thailand's trade bureaus have permitted Chinese authorities to audit durian's production and shipping processes to ensure food safety.

In December 2021, the omicron variant spread to major cities that supply Thai fruits and vegetables. As of January 13, 2022, the country surpassed 2.3 million cases. The rise in covid-19 infections could negatively affect production if there is a reduction in the availability of laborers for picking and packing. Durians are harvested from March to September, and the production procedures such as picking, sorting, and packing are labor-intensive. Despite Thailand's various challenges due to the pandemic, competitors will not pose a threat for the next 4 to 5 years as the production levels in competing countries are low. For example, in Malaysia, the world's second-largest durian supplier, export value has decreased from USD 29.3 million in 2018 to USD 17.7 million in 2020. However, as the high prices of durian encourage farmers in Malaysia, the Philippines, and Indonesia to grow more durian, Thailand's market share in durian exports may decrease over the next decade. Overall, as demand for durian is still increasing in China, Thailand will have to adjust and prepare for safe cultivation, packing, and shipping procedures to successfully export durians.