China's durian prices drop as Vietnam steps in to make up for gaps in Thai supply

Durian prices in China - the world's top market for the spiky, pungent fruit typically regarded as a luxury item - have fallen this month as Vietnam gains on Thailand in a heated export rivalry and consumers mind their budgets.

The online shopping platform Pupu placed the price of a 6-kilogram durian at 179 yuan to 209 yuan (US$25 to US$29) about a week ago - a drop from a recent price of 279 yuan - and some vendors have cited a low of 10 yuan for half a kilogram.

Zhao Yu, a 37-year-old finance professional, said prices fell this month at her usual fruit store in Shanghai every time the durians began to pile up. She recalled a low of 24 yuan per 500 grams compared to the 28 yuan she normally pays, but said this was not enough variation to affect her twice-monthly purchases.

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"When they have a lot, the prices go down," Zhao said. "When the piles are higher, you can see that clearly."

Competition for a larger share of China's seemingly bottomless market has pitted Thailand and Vietnam against each other. Demand for the fruit - a delicacy so popular it has been given as a wedding gift - has risen consistently in China, necessitating more imports as the domestic crop is comparatively tiny.

In April, the import price for durians from Thailand was US$5.80 per kilogram according to China's General Administration of Customs, slightly surpassing the total average of US$5.38 per kilogram. Conversely, Vietnamese durians were imported at US$4.22 per kilogram.

Overall, durian prices decreased compared to March, with Thai durians imported at US$6.49 per kilogram, Vietnamese durians at US$5.23 per kilogram and the average import price reaching US$5.63 per kilogram for the month.

Supply has also dropped, according to data from the customs administration. In the first four months of the year, imports fell by 32 per cent compared to the same period in 2023 to crest US$1 billion. Shipments dropped by 35 per cent in per-kilogram terms.

A deadly heatwave in Thailand in April and May reduced the Southeast Asian country's harvest, which normally commands higher prices than its Vietnamese peers.

High heat causes the skin to crack or the fibres to dry out in some durians, said Sam Sin, development director at S&F Produce Group. The company, a Hong Kong-based durian exporter, ships the fruit from Thailand to mainland China.

In Zhejiang province, fruit importer Huang Dapeng told a WeChat forum that some durians were getting "overheated" and were therefore priced below market rates.

Thai durians exported to China in the first four months of 2024 had lost 49 per cent of their value over the same period last year.

Thailand still held 66 per cent of China market share in the first third of 2024 by US dollar value, and its overall China-bound shipments expanded in 2023.

But Vietnam's share by value rose by 82 per cent in the first four months of this year, according to Chinese customs data.

Heat fluctuations notwithstanding, Vietnam is getting a bigger piece of the pie because production there costs less, a Thai consultant told Bangkok-based news outlet The Nation.

Vietnam "will step in to take over the market", The Nation said on May 13, citing Aat Pisanwanich, an adviser to Intelligent Research Consultant Co. in Thailand. Without government intervention, Pisanwanich added, production of Thai durian will drop by 53 per cent over the next five years.

Vietnamese exporters, who won permission to sell fresh durians in China about three years ago, save money by shipping the fruit across a single land border.

"It's got to be the transport - they can just drive it over," said Jack Nguyen, a partner at business advisory firm Mazars in Ho Chi Minh City. Exporters of other goods have saved money by using the same land route, he said.

Compounding the decline is the apparent price shyness of Chinese consumers this year. "Exceptionally weak consumer confidence has kept household wallets closed," said Harry Murphy Cruise, an economist at Moody's Analytics.

Durian is not the only agricultural product to be affected this way. The price of jackfruit - another tropical crop with a spiky exterior and sweet fragrant flesh - was recently halved, the Jinan Daily said on May 7.

"The private sector will likely face more intense competition across the board, and low prices simply reflect the market response of the demand and supply imbalance," said Gary Ng, Asia-Pacific economist for the Natixis investment bank, referring to price drops in several types of merchandise.

Prices have fallen mildly in Hong Kong, especially since the Mother's Day holiday on May 12, which a fruit stall owner surnamed Du attributed to a subdued economy overall. Durians from Thailand at his stall, Xili Fresh Fruit, were selling for HK$40 (US$5) per pound on May 16, and $30 per pound for those originating in Vietnam.

"The whole economy isn't doing well, whether in Hong Kong or mainland China, plus people are into healthy foods," Du said. "Durians are full of sugar."

But a consignment vendor at City'super, a chain of high-end supermarkets in Hong Kong, was charging HK$72 to HK$103 for a pound of Thai durian on May 16 - enough to bring the price of a whole fruit above HK$600. City'super declined to comment on its pricing.

"Supply and demand are imbalanced - there's too much supply," Sin said. "I think it's just because the economy is not so strong for consumption."

This article originally appeared on the South China Morning Post (SCMP).

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