Competition from Malaysia and the future of Vietnamese durian
Apart from Thailand, Vietnam also faces competition from Malaysia, which was allowed to export fresh durian to China in June 2024. Previously, China allowed imports of Malaysian durian powder and paste in 2011 and frozen durian in 2018. Although Malaysian durian is more expensive than Thai and Vietnamese durian, it is appreciated for its variety of flavors. However, Malaysia currently does not have enough supply to meet the large demand of the Chinese market, with Thailand still maintaining its position as the main supplier.
Lim Chin Khee, an advisor to the Durian Academy, said Malaysia will have difficulty competing in volume with Thailand and Vietnam, but can make a mark through product quality.
China's economy is facing many challenges in 2024, leading to a decline in consumer confidence and falling commodity prices, including durian. In April 2024, the import price of durian from Thailand was 5.80 USD/kg, while that of Vietnamese durian was 4.22 USD/kg. The decrease in durian prices is beneficial to consumers but puts pressure on exporters.
Moreover, fierce competition from Vietnam has also caused durian prices in China to drop significantly, with some places selling for only 10 yuan per half kilogram. This creates opportunities for consumers but also poses a big challenge for exporters, as they have to balance quality and price to maintain market share.
To maintain and improve competitiveness, experts say Vietnam needs to implement a number of important strategies. First of all, improving product quality is a key factor. Measures such as granting codes to growing areas, controlling quality from production to export, and ensuring compliance with international standards are necessary to maintain the reputation of Vietnamese durian.
According to the head of the Ministry of Agriculture and Rural Development of Vietnam, the immediate task is to turn durian into a national product, building a comprehensive policy that includes farmers, businesses, science, technology and infrastructure.
In addition, product diversification is also a potential direction. Minister Le Minh Hoan said that Vietnam has signed the second Memorandum of Understanding with China on processed durian, including durian pulp, durian seeds and frozen durian. This is an important step to diversify products and increase added value, while reducing pressure on harvest season.
Frozen durian and durian-based products are considered high value-added products, helping to reduce the pressure of harvest season and increase export value. It is expected that Vietnam's frozen durian exports could reach a turnover of 400-500 million USD in 2024 - the first year after signing the protocol, and could quickly become a billion-dollar agricultural export product in 2025.
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