28 July 2018

End Of Cheap Durian Because Of China

With this cheap run expected to come to an end next week as Johor’s durian supply runs out, and China muscling into the market for the mao shan wang variety, are the days of cheap premium durians over?


The programme Talking Point asked this question following weeks in which mao shan wang durians hit a price low of S$10 a kg, down from the usual S$28 to S$35.

Read more at https://www.channelnewsasia.com/news/cnainsider/cheap-free-durian-mao-shan-wang-musang-king-malaysia-china-10569802



------------------------

I choose to take the above with a pinch of salt.  Yes, for awhile, if China starts to import more durians than currently (recent years), the price will go up somewhat and quality may drop, but why do I not feel bothered?

There are 2 points not widely known nor discussed.  Firstly, there are many many young MSW trees in Pahang and also, Thailand has started cultivating MSW!


More plantations and young trees
I made 3 trips to Pahang in 2017. Along the route, we see plantations after plantations of durian trees. I wont say all these are MSW but when we checked with a distributor, he said majority are.

These are still rather young trees, appearing to be about 30 feet tall.  Given another 2-3 years, it would mature and produce bigger yields of durian.

Malaysia durians, are so far, naturally ripen. With that, the durians targeted for export to China will be quality checked to try prevent over ripen on arrival. The rejects, will likely end up in Singapore and for Malaysia local market.  

In about 5 years, there is a chance of a near oversupply situation (maybe not as bad as in the later 90s) and that may cause prices to come back to a healthy level.


Thailand Growing MSW Durians
It has been going on for awhile but unknown to most consumers.  It is a matter of time Thailand will master when to harvest MSW so it is rightly ripe on arrival in China.

The MSW we are consuming now, are not 100% from Malaysia, but there are some that are cultivated in Thailand but exported via Malaysia channel.

Some consumers are easily bothered by the source.  I don't!  I even consume Thai durian sometimes, as it can be rather tasty too.



Chinese Buying Farms
It was rumored that the Chinese are rampantly trying to acquire durian plantations in Malaysia.

I hope that is untrue but I tend to believe there could be some transaction (land lease rather).  I hope there are laws to prevent foreigners owning land (especially farm land) nor leasing it.  

But on a hind note, hey why not... if the Chinese are running durian farms and exporting it back to China, would that not leave the Malaysian farmers with lesser route but to continue dumping to Singapore?


Areas I Disagree With In The Above Report 
It was stated in the report, durian prices this season is at a 20 years low.

That is inaccurate in my knowledge. 20 years ago was 1998.  Sometime during those few years around 1998, prices were very low due to over supply.

In 2015, durian supplies were overwhelming and quality were among the best in many years.  In 2015, prices of MSW were even going at $8/kg.  Other variants were also sold at the lowest in memory.  (not to mention, $0.20 per small durian)

Next. It was stated in the report that the normal prices of MSW is $28-35/kg.  WAIT, where did the reporter get that information from? That is inaccurate. Didn't the reporter verify it? 

That high prices were in 2017! WHY?  In 2017, mid year supply in particular, durian supply were drastically affected by weather phenomenon of El Nino (2016) and onset of La Nina (2017) which more than halved supplies during the mid year season.  It was also due to durians being exported to China.

The reporter should verify prices for 5 years at least, before putting out that unverified report just based on the claims of whom they interviewed.

Durian sellers are not always telling the full picture.  For the price matter, it comes across to me, durian sellers are trying to condition consumers to high price from the news site.  


Summary
I guess, the recent season (July 2018) prices may be one of the lowest in recent times (except 2015) and we may not exactly experience such prices often and if China starts importing more, yes, prices will likely be impact.  But given the swats of land being used for durian farming, the price escalation during peak season may be digestible.


----- edit 27/01/2019 -----
Recently, I saw MSW going at $13-15/kg. Definitely not $28-35.


----- edit 23/06/2022 -----
The bumper harvest over the last 1 week proven a point again.  Even with the Chinese market, how did MSW drop to $12/kg or $15/kg currently?  

Don't be mistaken, the price per KG is determined by different grade, among other reasons.  So, the current price of $12 or $15/kg is Grade B or Grade C MSW.

Durian is a highly perishable fruit.  It can't be kept long, thus it is highly influenced by supply.  Demand hasn't changed very much, but supply does vary season to season.

This current low price was caused by the overwhelmed harvest from both Johor and Pahang, thus the crash and it won't last long.  My guess is, probably until late June 2022.  Get your fix soon, before it goes up again.

No comments:

Post a Comment