The Friendly Durian Competition in Southeast Asia

The Friendly Durian Competition in Southeast Asia

Published: 2024.09.18
Accepted: 2024.09.05
39
Associate/Lecturer
Singapore University of Social Sciences (SUSS)

ABSTRACT

Thailand, Malaysia, Vietnam and Indonesia are the major durian producers in the world and the humble fruit has since become a premium product with hectares measured in high value dollar terms per unit hectare. In this boom, China has become the world's largest importer and consumer of durians and both Thailand and Vietnam have capitalized on it by exporting fresh durians to the country. Malaysia meanwhile excels in frozen premium Musang King durians to China with an eye on increasing fresh exports soon. The Thai Mon Thong durian remains Chinese favorite, making Thailand the main exporter to China but it is meeting rising competition from the durians of its neighboring counterparts. Thai competitors like Malaysia are trying to rev up their exports by getting universities involved to deliver seminars on durian exportation to farmers, especially on the paperwork needed to clear Chinese customs. The Central Sulawesi government of Indonesia is also trying to offer help to its local durian growers to tap into the Chinese market by touting its port infrastructure for use in direct export to China. The durian growers meet rising challenges which they must overcome and they include: increasing salt-watering of the Mekong River Delta making durian-growing potable water source scarcer, heatwave and drought, hydropower dam blocking water supply and competing needs for potable water. The Vietnamese involve their university researchers to look into mitigating such problems, especially for the Mekong states. The durian-growing states are also mindful of causing a durian glut through overproduction. To compete with Chinese-grown Hainanese durians in the future, Southeast Asian countries are preparing to diversify their markets to the developed economies of the US and EU.

Keywords: Southeast Asia, Thailand, Vietnam, durian, Malaysia

BACKGROUND

The major durian cultivating countries in the world are Thailand, Malaysia, Vietnam and Indonesia, with an overall output of approximately 3 million tons per annum and Thailand make up an average of 94% of global shipments in 2020–2022, while much of the rest is provided by the Vietnamese cultivators (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. vii). There is a reason why durians are highly valued by the Southeast Asian farmers. The durian crop is a very value-added fruit because a hectare of it can earn a projected US$70,000 in profits for planters in a success harvest season, compared to a hectare of rice or coffee that makes approximately US$6,000 in profits annually (Tang, 2024).

Since China and its officials started fresh durians importation from Vietnam in July 2022, Vietnam’s durian exports to that country has increased up to US$2.2 billion in 2023 (a 10-times increase over 2022) (Tang, 2024). The speed of Vietnamese durian development is so fast that Vietnamese durian export growth has begun to challenge Thailand’s hitherto dominance as the largest durian exporter to China for more than 10 years (Tang, 2024). The Thai Mon Thong durian species is pegged at RMB80/kg or US$11.25/kg (Baht400/kg) in China, which is currently two times as costly as it is in Thailand, and one of the most heavily imported by China, the globe’s biggest durian importer and consumer (Thai PBS World, 2024).

With the influx of Vietnamese durians, Thai durian exports to China is encountering strong competition in the Chinese market from Malaysia, Vietnam and Indonesia, and Chinese domestic durians (Thai PBS World, 2024). The Kasikorn Research Centre released the data that Thailand’s fresh durian exports to China in 2024 are projected to hit US$4.5 billion which is a slower growth of 12% year on year (y-o-y) and a 30% decline from 2023 in terms of market share (Thai PBS World, 2024). According to Thailand’s Kasikorn Research Centre, the 30% market share decline compared to 2023 is due to declines in both export volume and value (Thai PBS World, 2024). The Chinese durian consumer market is still growing in terms of durian demand which Thailand partially satisfy (thus still growing 12% y-o-y) but, from 2023, competition from Vietnamese producers started to make Thai growers lose market share (by 30%). The Vietnamese gained around 31.82% market share in 2023 (Cagiatti, 2024). 

The Malaysians so far has been successful in exporting their premium durians which includes the Musang King (Maoshanwang) durians and experts share the secrets of this trade through organizing seminars in universities like Universiti Putra Malaysia (UPM). But, like the Thais, they eventually hope to be competitive quantitatively in fresh durians exports (Faculty of Food Science and Technology, Universiti Putra Malaysia, 2024). In Malaysia, to assist their durian farmers, the universities have mobilized experts on durian exports to China to share their insights, experience and knowledge with the farmers on how to penetrate the Chinese market in the Faculty of Food Science and Technology, UPM. These experts provide what is known as farm to table advice for the Malaysian durian farmers and one such limited-capacity seminar was held on 28 May 2024 by UPM at BKTM 1, FOOD 1 (Faculty of Food Science and Technology, Universiti Putra Malaysia, 2024).

The experts teach the Malaysian durian farmers to navigate the many requirements outlined by the Certification and Accreditation Administration of the People’s Republic of China (CNCA), “the authority from China that controls products entering their country”, according to the sharing session organized by Faculty of Food Science and Technology, Universiti Putra Malaysia (Faculty of Food Science and Technology, Universiti Putra Malaysia, 2024). The CNCA oversees the certification and accreditation of products such as organic products.

China imposes onerous rules and regulations on durian imports and has so far only allowed Thailand, Vietnam, the Philippines and Malaysia to sell durians to China (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. vii). To export to China, cultivators and packagers must have documented proof of qualifying for the phytosanitary and quality standards, including pest control records and product traceability that deters new entrants into the Chinese market (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. vii).

The Malaysian government through the Departments of Agriculture, Portal Rasmi Kementerian Kesihatan (KKM under Ministry of Health) and Malaysian Quarantine and Inspection Services (MAQIS) have designed export requirements indicated in the MyGAP Certificate in the farming industry, HACCP Certificate relevant to factory production and other related documents to facilitate durian exports to China (Faculty of Food Science and Technology, Universiti Putra Malaysia, 2024).

The Indonesians also want to be part of the action as its government promote Indonesian durian exports to China from Central Sulawesi province, an initiative supported by Central Sulawesi Governor Rusdy Mastura (Thai PBS World). Mastura spoke in Jakarta on 22 July 2024 Monday and indicated that the province could become the leading durian exporter to China with approximately 30,000 hectares of durian plantations and more than 3 million trees in 12 districts (Thai PBS World, 2024). Indonesia’s Agricultural Quarantine Agency indicated Central Sulawesi durian exports to China, worth approximately 600 billion rupiahs (about US$36.9 million) in total, can potentially benefit from the province's port facilities that are well-poised for direct export to China (with an estimated transportation time of 7-9 days) (Thai PBS World, 2024).

CHALLENGES FOR SOUTHEAST ASIAN FARMERS

Changes to the Mekong River is a major challenge for durian-cultivating farming communities in that region. Almost 50% of Vietnam’s durian harvest originate in the Mekong Delta and some Vietnamese durian farmers in the region like Tran Van Nghia imported Thai Mon Thong durian trees 20 years ago to cultivate in south Vietnamese Tien Giang province near the Mekong River and now it has become the center of Vietnamese durian cultivation (Tang, 2024). Nghia collaborated with varsity academicians and agricultural specialists to develop the best ways to farm durians (Tang, 2024).

Vietnamese durian farmers face challenges like climate change (heatwave and drought), hydropower dam impact and saltwater penetration into the Mekong River Delta that are affecting Vietnamese increases in durian exports to China to feed its growing demand (Tang, 2024). These challenges can affect the quality of their products and there is awareness that such challenges will grow and intensify with time if nothing is done about it (Tang, 2024). Vietnamese durian farmer Tran Van Nghia explained: “The biggest threat to durians is saltwater. Durian trees are highly susceptible to salt water” (Tang, 2024).

The hydropower dams in the Mekong River upstream dammed off large volumes of water, resulting in lower water flows downstream where Vietnamese durian farmers grow their crops (Tang, 2024). This causes seawater to seep into the Mekong River up to a distance of 120km upstream in some years (because of the El Niño effect) and the water then becomes too saline for durian cultivation, particularly during dry seasons (Tang 2024). Dr. Tran Ba Hoang, Director of the Vietnam Southern Institute for Water Resources, explained: “There is a significant drop this year in the water flow coming down to the Mekong delta because of upstream reservoirs and dams in China, Thailand and Laos” (Tang, 2024).

With the problems expected to get worse, some southern Vietnamese provinces declared a state of emergency over drought, with tens of thousands of people experiencing the lack of fresh water as extreme droughts and salinisation are made worse by an extended heatwave (Tang, 2024). Durian farmers have to compete with other residents lacking in water supply as well. With insufficient rain in more than four months, thousands of Tien Giang residents even had to depend on charitable organizations groups to operate water trucks to supply the residents while standing in queues with water (the waiting time can be as long as 4 hours) (Tang, 2024). The Vietnamese government increased networks of sluice gates and irrigation systems on the Mekong River to block off saltwater while durian farmers keep fresh water in ponds, lakes and canals as well as advanced irrigation facilities as sources of freshwater for their durians (Tang, 2024).

Another challenge is too many Vietnamese farmers turned to cultivating durians due to its large profits and this makes agricultural officials worried like Southern Fruit Research Institute’s Dr. Vo Huu Thoai who said: “Farmers in many areas have been switching from growing rice and coffee to durian for higher economic returns” (Tang, 2024). Approximately 50% of Vietnamese durian farms are fruiting with an output of 1.2 million tons of durian in 2023 and this number is projected to double in the couple of few years while China approved approximately only 13% of Vietnam’s durian farms for exporting to the China market (Tang, 2024). There may come the day of an oversupply glut.

Therefore, the agricultural officials try to prevent more farmers from growing durians with a fear of durian oversupply with an existing 150,000 hectares of durian farms nationally (more than the quota of 75,000 hectares established by Vietnam’s Ministry of Agriculture and Rural Development (Tang, 2024). As for the oversupply glut issue, to compete with the likes of Thailand and Malaysia, specialists are more preoccupied with increasing the quality of Vietnam’s durian export.

CONCLUDING REMARKS: QUALITY UPGRADES AND DIVERSITY POLICY

The Southeast Asian durian farmers like those in Thailand are gearing up for keener competition from the Chinese domestic producers. The Xinhua news agency has also reported that durian is grown for local consumption (the world's largest consumer of durian) in Sanya City, Hainan province (Thai PBS World, 2024). To maintain their durians' competitiveness, the Thai Kasikorn Research Centre argued that keeping their Thai durians quality high is the solution to stay competitive and ward off rivals (Thai PBS World, 2024). Indeed, durians have become a unique delicacy in China with a strong consumer base and Thai durians particularly are sought after for their sweetness and quality (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2).

     Thailand is likely to continue to enjoy some advantages in durian export, given that it is likely to benefit from the inauguration of a high-speed rail (HSR) connection between the Lao People's Democratic Republic (Lao PDR) and China in December 2021 (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2). This link cuts down on logistic time from several days/weeks for transportation by lorries or ships to a just 15 hours by HSR, facilitating fresh Thai durians access to Chinese consumers faster while ensuring product freshness (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2).

     Finally, while Thailand faces numerous challenges in durian exports to China, it may look into a policy of diversification of export destinations. Currently, in the global consumer marketplace, durians are still considered as novelty or niched products and the fragile perishability of fresh durians makes it difficult to transport fresh to longer-distance markets (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2). As a result, phytosanitary standards and product safety guarantees often cannot be fulfilled, especially in the meticulous and cautious customs checks amongst the developed world (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2). The only way is to sell them frozen, dried, or made into pastes and supplements to preserve the fruit and prevent it from spoiling (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2).

If Thailand and other Southeast Asian countries want to change this, they would need to mount consumer awareness campaigns to educate consumers about the positive points of the fruits while trying to bring down price per unit further (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2). These initiatives can help the Southeast Asian durian growers (including Thailand) to globalize the durian market (right now, with the durian entry into China, it has become a regional market) (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2). And the fruit must also justify itself to the Southeast Asian governments that it is as important as other tropical fruits such as bananas, pineapples, mangoes, and avocados in order to gain more attention from the authorities (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 2).

There are potentially high rewards to be gained if Thailand and other Southeast Asian markets can expand their durian exports to the world. And it could also offer the potential for other world regions in the Global South (especially the low-income ones) to participate in the exports (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 3). The Southeast Asian governments can impart the knowledge about quality assurance, cost-effective post-harvest handling and transportation of these perishable fruits (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 3). In high-income consumer marketplace such as the European Union (EU) and the United States of America (USA), consumer awareness and accessibility must be enhanced further (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 3).

The promising future is already showing beyond the shores of East Asia as Thai fresh durians exports to the United States more than tripled from 2013 to 2023, hitting an average of 3,000 tons per year in 2020–2022, at an average annual value of approximately US$10 million (Food and Agriculture Organization (FAO) of the United Nations, 2023, p. 3).

REFERENCES

Caggiati, Bree. Thailand loses market monopoly as China’s demand for durian increases. Asiafruit, 25 January 2024. Retrieved from https://www.fruitnet.com/asiafruit/thailand-loses-market-monopoly-as-chi...

Faculty of Food Science and Technology, Universiti Putra Malaysia (UPM). Activities Durian Export to China: Industrial Insights and arm-to _table Tips. UPM website, 23 May 2024. Retrieved from https://food.upm.edu.my/activities/durian_export_to_china_industrial_ins...

Food and Agriculture Organization (FAO) of the United Nations (UN). Durian Global Trade Overview 2023, FAO 2023. Retrieved from https://openknowledge.fao.org/server/api/core/bitstreams/84bbf2cb-d119-4...

Tang, Louisa. Vietnamese durian farmers face thorny issues that could threaten growing demand from China. CNA, 17 May 2024. Retrieved from https://www.channelnewsasia.com/asia/vietnam-durian-farmers-worried-grow...

Thai PBS World. Thai durian exports to China facing stiffer competition. Thai PBS World, 23 July 2024. Retrieved from https://www.thaipbsworld.com/thai-durian-exports-to-china-facing-stiffer...

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