China eats 800,000 tons of durian a year, and Vietnam has come to grab business in Thailand

Chinese consumers, who eat more than 80,<> tons of durian a year, dominate the global durian market.

According to statistics from the World Trade Organization (WTO) in 2022, China is the world's largest importer and consumer of durian, and China's imports account for 82% of global durian consumption.

At present, the common durian products in the Chinese market mainly come from Thailand, Malaysia, Vietnam, the Philippines, etc., of which the imported from Malaysia are mainly frozen durian and durian processing products, while the Chinese fresh durian market has long been covered by Thai durian.

Until August 2022, the General Administration of Customs issued an announcement to allow Vietnamese fresh durian to enter the Chinese market, and in January this year, with the signing of the Protocol on Plant Quarantine Requirements for the Export of Philippine Fresh Durian to China, Philippine fresh durian also entered the Chinese market.

The Chinese market is further opening up, and competition from Southeast Asian fresh fruit durian to grab Chinese diners is spreading.

Attack on Vietnamese durian

Entering October, the harvest period of Thai durian has long been over, but in offline supermarkets such as Hema, Yonghui, and Pagoda, durian is still a bestseller.

At the end of September this year, Hema Premier opened its first store in the country. It is Freshippo's first high-end supermarket, a Changning Longemont store in Shanghai that brings together high-quality imported goods from all over the world, and a number of overseas brands and imported goods are launching in the Chinese mainland market through this store. In this store, the reporter saw that its fresh placement area included both fresh long-legged crabs from Russia, blue lobsters from France, and Vietnamese gold-pillow durians priced at 9.24 yuan / jin.

"We have a team of global large imports, and we will continue to source around the world to select more goods to enter our supply system." Ge Dongsheng, operating director of Hema Shanghai, told First Financial Reporter. This year, Hema developed and introduced Vietnamese gold-pillow durian in large quantities for the first time, and it has been on the shelves of Hema stores nationwide since the end of June. The end of June is the tail season of golden pillow durian in eastern Thailand, but it is the peak season of Vietnamese golden pillow durian, because of the development layout of Vietnamese production areas, Hema currently achieves durian fresh fruit coverage throughout the year.

Hema is just one of the terminals for Vietnamese durian to reach Chinese consumers. On online platforms such as Jingdong and Pinduoduo, Vietnam's golden pillow durian is a best-selling product.

The successful "passing" of a fresh fruit durian in China has brought great wealth to Vietnam. In February this year, Deng Phuc Yuan, secretary general of the Vietnam Fruit and Vegetable Association, revealed in an interview that although Vietnamese durian has only officially entered China since September 2, as of February, China has imported durian worth about US$2022 million. He predicted that Vietnam's durian exports to the Chinese market could reach more than $9 billion this year.

In fact, judging from the speed of expansion of Vietnamese durian in the Chinese market, this forecast can be called conservative. According to Vietnam Customs statistics, in the first half of this year, Vietnam's fruit and vegetable exports reached 27.19 billion US dollars, of which durian exports increased nearly 8 times year-on-year, reaching 76 million US dollars. China is the most important exporter of durian in Vietnam, with an export value of US$8 million, accounting for 35% of Vietnam's total exports.

"The late season of Vietnamese durian can extend the supply period of fresh fruit durian, and the price of Vietnamese durian will be a little lower than that of Thailand, which has certain advantages." Chen Chen, general manager of the Xianmitan brand, told First Finance and Economics that his company has laid out the durian product supply chain for more than 20 years, maintained high sales of durian categories on online platforms such as Pinduoduo, and has been paying attention to Vietnamese durian in recent years.

For the industry, the development of Vietnamese durian is very important, and every year Chen Chen's company will investigate the situation of Vietnamese durian.

Compared with Thai durian, the purchase price of Vietnamese durian is often lower, and due to the geographical environment, the transportation time of Vietnamese durian into China is also shorter than that of Thai durian, and the cost of transportation and preservation is lower, so that the price competitiveness of Vietnamese durian may be further strengthened.

According to data from the Ministry of Agriculture and Rural Development, as of early 2023, the national durian planting area in Vietnam has reached 11,<> hectares, far exceeding the original planned area. The expanding durian orchards echo Vietnam's growing market share in the Chinese market and are putting pressure on Thai durian.

Thai durian is challenged

Thai durian is facing competition from Vietnam.

According to data from the General Administration of Customs, China's durian imports reached 2022,82 tons in 5, of which more than 78,95 tons came from Thailand, accounting for nearly 2023%. From January to June 1, China's durian imports in the first half of the year were 6,78 tons, of which 7,60 tons of Thai durian and 7,18 tons of Vietnamese durian were imported, although it still maintains its dominant position in the Chinese market, but the share of Thai durian in the Chinese market has dropped to nearly 6%.

With durians from Vietnam, the Philippines and other countries entering the Chinese market, it is not easy for Thai durians to hold the position in the Chinese market.

The advantage of Thai durian lies in its quality. Chen Chen told First Finance and Economics that the durian products sold by his company are mainly high-end quality, while the light time in eastern Thailand is longer, the rainy season is shorter, the starch content will be higher, and the corresponding durian taste and quality will be better, which is an incomparable advantage of other durians.

At the same time, Chen Chen said that due to the long-term development of the industry, the management and picking technology of durian in eastern Thailand are relatively standard, in contrast, Vietnamese durian has problems such as poor quality, picking, ripening and other relatively backward technologies, which may affect the quality control of the final imported durian, which has also become the reason why Xianmi Agent does not consider importing Vietnamese durian at present. However, he has also clearly felt in recent years that with the increasing number of people doing the Thai durian import business, although the production capacity of Thai durian has increased every year, the price has not fallen, and the price of high-quality raw materials has increased year by year, and there is potential pressure.

China's swelling durian consumer market may have eased the throes of Thailand's durian share. Despite the decline in market share, from January to June, China's imports of Thai durian increased by 1% year-on-year, worth US$6.20 billion, an increase of 30% over the same period last year. Chen Chen believes that the durian consumption of Chinese people is sinking to the third and fourth tier cities, the popularity of durian is also getting higher and higher, this year's sales of fresh secret exploration durian category has increased by 300%-22% year-on-year, in the future, he is still optimistic about the growth trend of durian consumer groups and market size.

More Southeast Asian countries are targeting China's fresh fruit durian market, and under layers of pressure, Thai durian is also developing new competitiveness.

In February this year, when talking about the export of Thai durian, Mananya Thaiset, deputy minister of agriculture and cooperatives of Thailand, said that Thailand currently has many competitors, so in order to maintain the export market of Thai durian, it is necessary to pay attention to and supervise the quality of durian to meet export standards.

Trade ties

According to the statistics of the World Trade Organization in 2022, China is the world's largest importer and consumer of durian, and China's imports account for 82% of global durian consumption.

The export of durian from Thailand and Vietnam is closely linked to the Chinese consumer market. In fact, China's durian imports also cover the Philippines, Malaysia and other Southeast Asian countries.

Customs statistics show that from January to August this year, the Philippines exported 1 tons of fresh durian to China, with a value of 8.917 million US dollars. In September, during the 354th China-ASEAN Expo, Philippine Undersecretary of Trade Rudolph suggested that capacity constraints severely restrict Philippine durian exports to China, and stakeholders must work to address the low productivity of local growers in order to capture demand from overseas markets. He hopes that in the future, Philippine durian can replicate the successful experience of banana exports and dominate the Chinese market in terms of durian.

Chinese companies are also going deep into Southeast Asian countries, not just waiting for intermediate traders to import.

"We are now building a global supply chain, canceling the original action of purchasing fruits through intermediate channel providers, KAs and suppliers." Ge Dongsheng told the first financial reporter that at the beginning of this year, Hou Yi, CEO of Freshippo, went to Southeast Asia, the United States, Europe and other places to directly seek cooperation opportunities with agricultural bases in the production areas. "After taking the goods, we send the source of goods back to China as soon as possible, regardless of chartered flights or containers, to ensure the efficiency and stability of the supply chain."

Chinese companies skip the middleman and directly connect with Southeast Asian origins, which helps stabilize supply channels and reduce intermediate costs. Some companies have also established their own processing bases directly in the local area. Chen Chen told First Finance and Economics that his company built its own processing plant in eastern Thailand in 2014 to ensure a stable fruit source and qualified picking and processing processes.

The opening of the China-Laos Railway has become a new channel for fruit trade between China and Southeast Asian countries.

Auramon Supthaweethum, director of the Trade Negotiations Department of the Ministry of Commerce of Thailand, said that since the opening of the China-Laos Railway in December 2021, Thailand's fruit exports to China have increased significantly, and the opening of the railway has shortened the transportation time to less than 12 hours, which is significantly less than the previous road transportation time.

Thai durian is the largest export product from Thailand to China via the China-Laos Railway in the first half of this year, and data from Thailand's Ministry of Commerce shows that from January to May 2023, Thailand exported fresh durian worth 1,5.20 million baht through the China-Laos Railway, an increase of 7318% over the same period last year. (Author: Chen Yangyuan Source: Yicai)