Earlier this year, there was high expectation from the Chinese market that the export price for Malaysia durian will be significant lower than previous year due to the forecasted huge volume coming online in June to August. However, this has not happened. Datuk Vincent Chan, Executive Director of Shanghai Youxiang Trading Co., Ltd. shared his insights on the durian market.
“I expect the export pricing to increase further in the coming months due to 3 main reasons. The first is the climate is not too favorable in the past 6 weeks due to high rainfall in Malaysia which affected the quality and production output due to the deflowering caused by heavy rain. The Malaysian Ministry of Agriculture confirmed the dropped in overall production volume to less than 300,000 tons at their press release last week in Malaysia. Second reason is due to the movement restriction ordered by the Malaysian government to contain the COVID 19 pandemic that caused major issue with the quality and overall production of durian this season. Growers are not able to tend to their orchard and properly and important process such as water irrigation and fertilizer are not able to proceed which caused the quality and production volume to drop significantly. ”
“The last reason that I think export price will not go down is due to the changes of shopping habits of Malaysian due to the COVID 19 restriction as well. We have seen explosive growth of e commerce businesses selling durian online during the past 3 months as people adapt their shopping habits and buy durian online and get fresh durian delivered to their door steps. Also, there are a lot of white collar workers who have either lost their job or work from home started to sell durian online to complement their income and therefore the e commerce sphere in Malaysia has seen an incredible growth in the last 3 months. There seems to be insatiable demand of Musang King for the domestic market at the moment and I expect this trend to grow further in to a foreseeable future.”
“From my opinion the Malaysia durian export price will at the most reach to last year’s pricing and not more but this definitely will influence the competitiveness of Malaysian durian in the Chinese market. The whole fresh fruit industry in China is facing huge and difficult challenges due to the effect of COVID 19 and also Thailand durian is coming into the market in full force and an increase in volume with significant lower pricing compare to Musang King from Malaysia. As for consumer switching to other durian from other origins, I think at the moment this will be less likely the case as China only allow two countries to import Durian into China legally namely the fresh durian from Thailand and Frozen from Malaysia while other potential durian producing countries are still not approved yet. Secondly, other origin countries durian quality and production capabilities is still way behind before these countries are able to meet the Chinese market strict and high demand of quality durian.”
"Definitely we are facing big challenges due to the COVID 19 pandemic in China and our sales have been slow ever since the lockdown order to stay at home. Consumers habits are also changing and are more restraint in their purchase decision and this cause some impact for expensive fruit category such as Musang King durian. Having said that, we are adapting to the new environment by streamlining our cost and at the same time expand our capabilities to directly source and manufacture ourselves with our new factory facility ready for production in the next two weeks. This will enable us to cover more market and venture into B2B segment of our business while retaining our premium B2C market in China."
“I think COVID 19 has open a whole new frontier for the Malaysian durian industry because they suddenly realized that there are a lot of untapped market that the industry can continue to penetrate deeper when China closed its door and no export orders are coming due to the pandemic. Durian growers and manufacturer realized the potential and important of domestic market and neighboring Singapore market which are being driven by the convenience of e commerce ecology to sell their durian easily while remain very profitable. The stay at home order by both Malaysian and Singaporean government have unleash and consumers are adaptable to order their durian online to quench their durian thirst. A lot of downstream durian product such as durian moon cake, durian mocha and durian ice cream are also making big impact in these markets and the whole durian industry woke up to whole new lucrative opportunities besides China market. ”
“My advice to customers in China is to ensure they have the right partners in Malaysia to ensure they will be able to source and supply good quality durian to China. I think this season there will be so much competition for fruits that Chinese market might lost out in the end due to the wait and see attitude of many fresh fruit distributors currently in China. End of the day, when fresh durian from Thailand finish their season end of the year, Malaysia frozen durian will be the main stream durian category in the market no matter the price. "
More Information:
Contact: Cai Fang, General Manager
Company name:Shanghai Youxiang Trading Co., Ltd.
Email: sophia.cai@sovininternational.com