Philippine Durian Access to the Chinese Market will Put Further Pressure on Prices

Published Feb 1, 2023

Durians, an important commercial crop in the Philippines, gained official market access to China in the wake of a recent state visit from the Philippines’ president to China. The new market access promise to bring price stability for Chinese consumers when the Thai Durians’ season is about to end. However, since Vietnamese durians were allowed into China in July 2022, prices in the Chinese market have decreased due to the high volume of Vietnamese supply. Thus, the new entry of the Philippine durians poses further pressure on price markets, with durian producers from the Philippines facing soaring input costs in the wake of new certifications.

China and the Philippines have reached an agreement on phytosanitary protocols for the importation of fresh Philippine durians into China. The Philippine government announced the agreement in the wake of a recent state meeting between President Ferdinand Marcos Jr. of the Philippines and his Chinese counterpart President Xi Jinping on January 4th.

The statement also indicated that the Philippines is estimated to export USD 260 million worth of durians to China in 2023, with the fruit originating from certified orchards in Davao City, Davao del Sur, and North Cotabato. The Philippines will be the 3rd country permitted to export fresh durian to China after Thailand and Vietnam were granted access. In 2021, China was the biggest importer of durian, reaching a volume of 822 thousand mt with a value of USD 4.21 billion. Furthermore, in the first half of 2022, China's import volume increased by 60% YoY.

Previously in September 2022, Vietnamese fresh durians entered the Chinese market with the first shipment of 100 mt. Since then and until W48, the fresh durian market price in China has decreased due to the high volume of Vietnamese durian arriving in the Chinese market. A similar market reaction is expected, with durians from the Philippines entering the market. For Ricco Zhao, Tridge’s Distribution Manager in China, due to quality and storage issues, Thai Durias can’t be replaced easily with other origins. “In the short run, Vietnam Fresh Durian cannot replace Thai Durian, but it will give them big pressure on the price competition,” he explained.

Before the entry of Vietnamese durians, Thailand supplied all of China's fresh durian imports. Therefore, when Thai durians are short, the supply gap leaves hiking prices for Chinese consumers as they are left with China’s limited domestic production. For Mr. Zhao, there is no doubt that durian is increasingly becoming popular among Chinese consumers, and price stabilization is the reason to allow other supplying countries to enter the market. “The market is clearly opening for other origins to participate. However, the major challenges for new suppliers are the strict the Chinese market is when it comes to food quality, safety, and traceability. Small and medium farmers from the Philippines will struggle to meet these requirements”, he noted.

The high price of agricultural inputs like fertilizers is still a challenge for all Durian farmers globally, including the Philippines. Aside from that, farmers should now meet the strict standard of the Chinese market. Philippine farmers will need to improve their farming practices to pass the phytosanitary requirements and be granted the certifications needed in the global markets.

For farmers to qualify, they need to get a PhilGAP (Good Agricultural Practice) certification from the Bureau of Plant Industry (BPI). They will have to be accredited to have their own farm code. Farm codes are important in the traceability requirement. They should also have BPI-accredited packing plant partners. Then finally, the products should pass the China Inspection and Quarantine and General Administration of Chinese Customs (GACC).