News in Brief:
– Durian prices in China have dropped by 30% due to increased Vietnamese exports and reduced Thai supply from heatwaves.
– Thai farmers struggle with economic strain, while Vietnamese durian exports benefit from lower costs and logistics advantages.
The current heatwave sweeping across Southeast Asia has brought about significant changes in the durian market, affecting farmers in unexpected ways. With a sharp 30% drop in durian prices in China, primarily driven by an increase in Vietnamese exports and a dwindling Thai supply, the repercussions for farmers are substantial.
Vietnam has stepped up to fill the gap left by Thailand’s diminished durian harvest. This shift has caused prices in China to drop from 279 yuan ($39) per 6kg durian to as low as 179 yuan ($25). Vietnamese durians, imported at a more affordable $4.22 per kilogram, are becoming a favoured choice over Thai durians, which cost $5.80 per kilogram in April 2024.
For farmers in Thailand, the heatwave has been devastating. High temperatures have caused many durians to crack or dry out, reducing their market value. Sam Sin, Development Director at S&F Produce Group, notes that these conditions have forced prices below market rates. With a 49% drop in export value in the first four months of 2024, Thai farmers are struggling to maintain their livelihoods.
While Thai durian exports to China still hold a significant 66% market share, Vietnam’s share has surged by 82% in value in early 2024. This competitive edge is partly due to the lower production costs and simpler logistics for Vietnamese exporters, who benefit from direct land routes into China. Jack Nguyen from Mazars highlights that these logistical advantages make Vietnamese durians more economically viable for Chinese importers.
Lower consumer confidence and a subdued economy in China have caused the demand for luxury items like durians to wane. This has further driven prices down, impacting not just the durian market but other tropical fruits like jackfruit, which also saw a price reduction.
For farmers, adapting to these changes is crucial. Diversification of crops and exploring new markets might be necessary to mitigate the impacts of climate change and economic fluctuations. Understanding these dynamics can help farmers make informed decisions and sustain their livelihoods amidst an increasingly unpredictable market.
