How will the Thai durian market perform in five years time? Will it be bullish or bearish? Thai experts believe that if China increases its imports of Thai durians by 15% and the price is pushed up to 400 baht per kilogram, then the export volume of Thai durians will skyrocket by 90%. However, based on the current data comparison, it will be found that the risks faced by Thai durians are higher than in the past.
The latest durian risk index research report released by Dr. Yi, director of the International Trade Research Center of the University of Thai Chamber of Commerce, covers the COVID zero-tolerance policy, transportation, production, Sino-Thai relations, durian quality in neighboring countries, industry monopoly, labor shortage, counterfeiting problems and climate issues. The results found that, compared with 2018-2019, the bullish market for durian exports from Thailand in the next five years from this year has become relatively vague.
That is, it is difficult for Thai durian to maintain high growth. Due to the large reliance on a single market in China, unless China increases the import of Thai durians and the price increases accordingly, then there is still a bullish opportunity for Thai durians. Otherwise, the situation will be very difficult.
According to the report, the area under durian cultivation in northeastern Thailand has grown nearly six-fold over the past 10 years. As the price of durian has increased year by year, rubber farmers, cassava farmers and other crop farmers have switched to durians. The annual production of durians in Thailand is expected to increase by 337,648 tons from 2022 to 2026, which is five times the increase in the past 10 years.
Cross-border transportation affects Thailand's durian export performance
The average price of Thai durians is expected to be 136 baht per kilo in the next five years. However, the key to whether Thai durians can be bullish is still determined by China. If China’s import volume increases by less than 10%, the price of Thai durians is expected to hit a record high of 312 baht per kilogram by 2026, and the average annual price in the next five years will also reach 271 baht per kilogram; if the import increase is between 10-15%, the price of Thai durian will be between 362-417 baht by 2026, and the five-year average price will be 313-361 baht.
In the next five years from 2022 to 2026, the total production of durians in Thailand, Asia-Pacific and the world will increase the cost of production. Among them, the global total output increased by 1.8 times, the export volume increased by 2.2 times, and the domestic sales increased by 1.7 times. Global annual production increased by 612,276 tons, and annual exports increased by 273,937 tons.
With the annual export of durians from Thailand soaring to 700,000 tons, the total output of durians in the Asia-Pacific region increased by 2.4 times to 2,904,697 tons. It is expected that the export volume will increase by 2.1 times to 1,905,584 tons, and the domestic sales volume will increase by 3.3 times to around 999,114 tons. Taking 2022 as an example, domestic sales of durian will account for 24.6%, and the remaining 75.4% will be exported. After 5 years, the proportions were 34.4% and 65.6%.
Neighboring countries including China have begun mass production of durians, which has led to a backlog of Thai durians
The increase in durian production from ASEAN member countries such as Malaysia, Indonesia, the Philippines, and Vietnam will also pose new challenges to Thailand’s durian exports. It is expected that durian production in Malaysia will increase by 44.9%, Indonesia will increase by 28.9%, the Philippines will increase by 44%, Vietnam will increase by 93.9%, and other countries in the Asia-Pacific region will increase by 82.5% in total.
If only looking at CLMV countries, their total durian production this year is 701,542 tons, and five years later, in 2026, it will increase to 1,115,351 tons, an increase of 59%. At that time, Vietnam will produce the largest output of about 700,000 tons, followed by Cambodia with more than 210,000 tons, followed by Laos with more than 130,000 tons and Myanmar with more than 60,000 tons.
As for the Thai durian market transaction value in 2022, it will be about 700 billion baht, an increase of 60 billion baht or 8.6% from 640 billion last year. The east is the highest, followed by the south and the north.
He believes that the prospects for Thai durian in the next five years depend on three factors: the first is the relationship between China and Thailand, the second is the consumption of durian in China, and the last is the quality of durian.
Source: thaizhonghua.com