Thai Durians Facing Tough Competition in the Chinese Market Amid Higher Prices

Published 2023년 6월 16일

Chinese consumers who mainly bought Thai Monthong durian varieties have started to buy fresh durians from Vietnam. The Chinese market has recently expanded its fresh durian sources, and Thai durians now face fierce competition. In Q1-23, China’s imports of fresh durians reached 91.4 thousand mt, with 70% belonging to Thai origin and 29.5% from Vietnam. The data shows a major trade shift in the fresh durian Chinese market, with Thai durians no longer dominating the market. Furthermore, Thai durians have lost competitiveness in the market due to their increasing prices driven by a reduced supply. With cost and logistical challenges, Thai durians have started their peak sales season in China with a new logistic route.

According to data from China Customs, China’s imports of fresh durians in Q1-23 reached 91.4 thousand mt worth USD 502 million, representing a 154% YoY increase in volume and 143% in value. Of those imports, 64 thousand mt originated from Thailand, which represents 70% of the market share with a value of USD 370 million. Most of the remainder came from Vietnam, with 29.5% of the import share, a total volume of 27 thousand mt, and a value of USD 132 million. With the Q1-23 trade data, a significant shift in the fresh durian Chinese market is attested, with Thai durians no longer dominating the market.

The Chinese market has recently expanded its fresh durian import sources, and Thai durians now face fierce competition. In recent years, Southeast Asia and other major durian-producing countries aimed for China's substantial fresh consumer market as they could access only the frozen one. Before 2022, Thailand was the only country that could export fresh durians to China due to the strict transportation and storage conditions that fresh durians required. However, in Jul-22, the import of Vietnamese fresh durians that met the requirements of China was approved. Furthermore, in Jan-23, imported durian from the Philippines was also approved and will start competing.

In 2022, China imported 825 thousand mt of durian, 95% of which still came from Thailand. This means that in 2023, Chinese consumers who mainly bought Thai Monthong durian varieties started to buy fresh durians from Vietnam. As a result, the supply capacity of durians in the Chinese market has increased, and fresh durians can basically be supplied throughout the year.

Source: Tridge, ITC

Since May, Thai durians have entered the peak sales season in China when a wider availability of durians are on the Chinese market. However, this year, Vietnamese durians seem to be more competitive in the market due to lower logistic costs and lower prices. Although Vietnam is far behind Thailand regarding customs clearance, product quality, and supply chain management, it has lower transportation costs and logistic times than Thailand.

Wholesale prices in the local market have also started to be a significant challenge in Thailand, while at the same time, they have been pressured in China due to the broader supply. In May-23, the wholesale price of Thai durian started to soar on strong demand but a reduced supply. In week 21, the wholesale price in the local market reached USD 5.09/kg, a 21% WoW increase and a 50% increase from two weeks before. The main reason is that the supply of durians in eastern Thailand has decreased, and the southern production areas still need to start to supply durians in large quantities.

Unfavorable weather has momentarily reduced and delayed the crops in Thailand, which, combined with strong demand from China, has increased prices. The price increase at this time of the year does not favor Thai durians as they will likely lose competitiveness to Vietnamese durians, which tempt to be lower in price.

Putting in context the durian prices in the Chinese market, the average import price during Q1-23 was USD 5.49/kg, a decrease of 4.2% compared with the same period of last year. The average import price for Thai durians was USD 5.77/kg, while for Vietnamese durians, the price was lower at USD 4.81/kg.

One important event that will favor Thai durian imports to China this year is the opening of the new route from Thailand to the Chongqing border crossing. Over the last week of May, the first 150 thousand durians from Thailand were first transported by road to Laos, where they were loaded on a train that traveled into China via the China-Laos Railway. The route will be Thai durians' first direct cold-chain train that reached the megacity via the New International Land-Sea Trade Corridor. The entire journey took four days instead of eight to ten days on previous sea-road routes, which will reduce costs and support the price of Thai durians in China.