The key to how Thai durian performs in the next 5 years is in 3 aspects
Mass production of durian in China and neighboring countries will pose a challenge to Thailand Affecting the market 10 factors
Thailand Chung Hua Daily reported how is the thai durian market performing after 5 years, bullish or bearish? Thai scholars believe that if China increases the import volume of Thai durian by 15%, and the price is pushed up to 400 baht per kilogram, then Thai durian exports will soar by 90%. But a comparison of the current data will show that the risks faced by Thai durian are higher than in the past.
The latest durian risk index research report released by Dr. Shu, director of the International Trade Research Center of the University of the Thai Chamber of Commerce, covering the new crown zero-out policy, transportation, production, Sino-Thai relations, durian quality in neighboring countries, industry monopoly, labor shortage, impersonation behavior and climate issues, found that compared with the 2018-2019 Thailand durian export market in the next 5 years since this year, it has become relatively blurred.
In other words, it is difficult for Thai durian to maintain high growth. Due to the large dependence on China's single market, unless the Chinese side increases the import volume of Thai durian and the price is also increased accordingly, then the Thai durian also has a bullish opportunity. On the other hand, the situation will be very difficult.
The report notes that the area under durian cultivation in northeastern Thailand has increased nearly sixfold in the past 10 years. As the price of durian increases year by year, rubber farmers, cassava farmers and other crop farmers have switched to durian. Thai durian annual production is expected to increase by 337,648 tons in 2022-2026, an increase of five times that of the past 10 years.
Cross-border transport affects the performance of Thai durian exports
The average price of durian in Thailand is expected to be 136 baht per kilogram over the next 5 years. However, the key to whether Thai durian can be bullish is also decided by the Chinese side, if china's import volume increases by less than 10%, then by 2026, the price of Thai durian is expected to refresh the record high of 312 baht per kilogram, and the average annual price in the next 5 years will also reach 271 baht per kilogram; If the import increase is between 10-15%, the price of Durian in Thailand will be between 362-417 baht by 2026 and the average price in 5 years will be 313-361 baht.
In the next 5 years from 2022 to 2026, the total production of durian in Thailand, Asia-Pacific and the world will increase at a cost, of which the total global output will increase by 1.8 times, the export volume will increase by 2.2 times, and the domestic sales volume will increase by 1.7 times. The annual increase in global production is 612276 tons, and the annual export is 273937 tons.
With the surge in Thailand's annual durian exports to 700,000 tons, the total production of durian in the Asia-Pacific region has increased by 2.4 times to 2904697 tons, exports are expected to increase by 2.1 times to 1905584 tons, and domestic sales have increased by 3.3 times to about 999114 tons. In 2022, for example, durian domestic sales accounted for 24.6%, and the remaining 75.4% was used for exports. Five years later, the proportion was 34.4% and 65.6%.
Neighboring durian, including China, began mass production of a backlog of Thai durian shares
The increase in durian production in ASEAN member countries such as Malaysia, Indonesia, the Philippines and Vietnam will also pose a new challenge to Thai durian exports. It is estimated that the production of durian in Malaysia will increase by 44.9%, Indonesia by 28.9%, the Philippines by 44%, Vietnam by 93.9%, and other countries in the Asia-Pacific region will increase production by a total of 82.5%.
If you only look at the CLMV countries, their total durian production this year is 701542 tons, and in 2026, 5 years later, it will increase to 1115351 tons, an increase of 59%. Vietnam's largest output will be 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 in 2022, the transaction amount is about 700 billion baht, an increase of 60 billion baht from last year's 640 billion, an increase of 8.6%. The east is the highest, followed by the south and north.
He believes that the key to the bullish or bearish Thai durian after 5 years is in 3 aspects, first of all, The relationship between China and Thailand, followed by the consumption of Chinese durian, and finally the quality of durian. The bearish market includes 10 factors, such as problems in Sino-Thai relations, the decline in the quality of durian, mass production of durian in China and neighboring countries, counterfeiting problems, cross-border transportation problems, weather problems, industry monopolies, labor shortages, and the epidemic and Thai production.
Durian quality affects export performance