SOURCE: Le Nguyen, Voa News
As Vietnamese durian farmers celebrate the opening of trade with China, experts are cautioning against becoming reliant on a market that can disappear if consumer tastes change or long-running friction between Beijing and Hanoi erupts again over competing claims to the South China Sea.
“The Chinese market is so huge. When they are into a certain fruit, we’re actually struggling to grow enough to supply to them,” said Vo Tan Loi, director of Phuong Ngoc-Cai Be Company, a veteran fruit exporter in the Mekong Delta’s Tien Giang Province.
The region is known for the fruit, which looks like a giant’s spiky massage ball and so pungently permeates its surroundings that it has grounded planes and forced building evacuations.
According to data from the General Department of Vietnam Customs reported by the local Nhan Dan Daily, durian sales are expected to top $1 billion in in the Chinese market by the end of 2023. Durians are China’s most valuable fresh fruit import, valued agt $4.21 billion in 2021, mostly from Thailand.
And while public consumption of durian is banned in many places in Southeast Asia due to its stench, China’s fresh durian lovers are willing to pay top prices for the fruit’s custardy innards with an indescribable taste.
Complicating what would otherwise be a quest for a coveted delicacy is the sometimes-fraught relationship between Vietnam and China, which is Vietnam’s largest trading partner and market. The two nations have long been locked in a territorial dispute over islands, fishing grounds and drilling rights for oil and gas in the South China Sea.
As China has become increasingly assertive and the U.S. has become more involved in the region, “the risk of armed conflict between Hanoi and Beijing is “low but growing,” according to a 2021 report by the International Crisis Group.
Loi cautioned that farmers could be “hit so hard” if China blocks durian imports over geopolitical tensions or their price drops due to oversupply.
“It takes a durian tree up to seven to eight years to mature and yield fruits, so farmers stand to lose seven to eight years if unexpected upheavals happen in the Chinese market,” he said.
Loi told VOA Vietnamese that over his years of experience he has seen several cycles when farmers abandoned one crop to shift to another that yielded higher profit in the Chinese market.
“When jackfruit price hit [$2.5-$3] a kilogram they wiped out oranges and mandarins to grow jackfruit. Now that durian can be officially exported to China, they are starting to fell jackfruit orchards,” he said, referring to price fluctuations of early 2019.
VOA Vietnamese asked Vietnam’s Ministry of Industry and Trade and the trade mission at the Vietnamese Embassy in Beijing about measures to shield durian farmers from market upheavals but received no reply.
Rush to export
Nguyen Quang A, a dissident Hanoi-based economist who co-founded the now-closed Institute of Development Studies, warned against the rush to export durians.
“It’s good that Vietnam can tap into the huge Chinese market for its durian,” A told VOA. “Vietnam can use its close proximity to China as an advantage in exporting fresh fruits.”
However, he said, Vietnamese authorities should learn lessons from China’s past behavior on importing fruit. “Political upheaval between the two countries is unpredictable, while the Chinese market is very volatile where policies can change overnight,” he told VOA Vietnamese.
“Vietnam’s policymakers should take into account a risk factor when exporting to the Chinese market and have contingency plans in place,” he said, recommending the exploration of alternative markets, expanding the domestic market of 100 million people or giving incentives to fruit-processing industries.
Durian negotiations
Beijing agreed to add durian to its list of Vietnamese fruits approved for import in July 2022 after four years of negotiation. Until this agreement, Thailand was the only supplier of fresh durian to the Chinese market, according to the Produce Report.
October was the first full month of China’s retailers stocking fresh Vietnamese durians.
During the last three months of 2022, Vietnam exported to China almost 41,000 tons of durians worth $188 million, according to data from China’s General Administration of Customs, reported by the Nhan Dan (The People) Daily.
By the end of 2022, China had accredited 113 durian growing zones and packaging facilities in Vietnam. By early March 2023, there were 350 accredited growing zones and packaging facilities, according to the China’s General Administration of Customs. China customs authorities continue to inspect sites for accreditation.
In 2021, Vietnam exported fruit worth $1.01 billion to China, according to the Nong Nghiep (Agriculture) newspaper, citing data from the Vietnam Trade Mission in Beijing, making Vietnam the third-biggest fruit exporter to China, after Thailand and Chile.
In Tien Giang Province, farmers “are treasuring and taking good care of their durians,” as traders seek the best price from exporters,” Loi told VOA Vietnamese. When Thailand’s durian growing season that runs from April thru August ends, Vietnamese farmers can increase the price of durians per kilogram from $3 to $9, according to Loi. In Vietnam, the durian season runs from May to November, according to the Food and Agriculture Organization, a specialized agency of the United Nations.
Vietnamese farmers in the Mekong Delta are shifting away from growing jack fruit and rice toward durian while in the Central Highlands, farmers are growing durians on what were formerly coffee or pepper farms, the national broadcaster VTV reported in late February.
The Ministry of Agriculture and Rural Development envisions durian acreage will be 65,000-75,000 hectares by 2030, but according to the ministry data reported by VTV, durian is already growing on 80,000 hectares and farmers are planting more.