Zoilo “Bingo” P. Dejaresco III l February 14, 2023 l Manila Bulletin
Known as the “King of Tropical Fruits”, durian, the unique-smelling fruit, according to Trade and Industry Secretary Alfredo Pascual, is getting intense attention, particularly from China which accounts for 82 percent of all durian importation in the world. It is estimated to turn shortly into a $25-billion industry, according to “Discover” magazine.
In the Davos Economic Form, vast interest was shown by Chinese buyers which could result in expanding the durian plantation (currently in 41 provinces with 1.5 million fruit-bearing trees) into thousands of additional hectares. According to reports, these could include those belonging to the indigenous people benefitting many tribes. According to Xinhua News, if plans succeed, the durian expansion will create over 9,960 direct and 1,120 indirect workers for the country.
The Protocol: Phytosanitary Requirements for PH Durian has been signed by the Philippines and China, thus, placing the nation at an even keel with our ASEAN rivals, mainly, Thailand, Malaysia and Indonesia.
For now, PH is a poor 7th largest fresh durian exporter (per “Tridge”) with an estimated 78,000 MT total production of which 41,000 MT is produced in the Davao region, the durian capital.
Thailand lords it over, market share-wise, cornering 81 percent of the export market providing for 40 percent of current Chinese demand. As of 2020, Thailand’s durian export figure stood at 180,000 tons valued a $2.5 billion. It mostly sells the yellowish-sweet variety with a longer shelf life and many fruit importers demand uniformity of kind (but the Philippines has 21 different varieties).
Durian exportation in Thailand is so pervasive, according to the University of Thai Chamber of Commerce, that it is now the country’s top export at 187 billion baht, eclipsing the 100 billion baht (rice) and 90 billion baht for rubber.
According to industry sources, there is very close coordination between the durian private sector growers and the Thailand government, the latter sometimes providing the land, setting up the facilities, and buying back all the produce.
Current durian farm gate prices (depending on the variety) sell for P35-P65/kilo, retail at about P 150/kilo in the Davao area, and about P350/kilo in Manila. Durian can be eaten fresh (raw), frozen, or processed candies and juice. The good quality kinds of fruits are for export. Fruits that fall from the tree are the ones normally processed as they have a very short shelf life (as short as two days).
Durian trees can last up to 10 years with one hectare of such bearing from 40-60 fruits per tree up to a maximum of 80 fruits. Intercropping with bananas, jackfruit and cacao is generally not encouraged especially by Chinese buyers due to the risk of pest infestation.
Like any industry, it also faces some challenges. Shipping via sea won’t do due to the perishability of the product and in the Philippines, not all airlines accept durian as part of their acceptable cargo shipment. Shipping costs in Thailand (via air) have reportedly gone up three times due to the current energy crisis.
The fruit uses a variety of fertilizers like urea, one with phosphorus, potassium, and other chemical sprays before harvesting- many of which have risen tremendously in prices due to the Ukraine problem. To go for volume production, semi-mechanization is in order. Financing can be pursued along the lines of assignment of warehouse receipts, for instance, and against chattel mortgage over equipment for instance.
Still and all, the overall prospects of the country exporting and getting a bigger share of the voracious durian consumer that is China are very promising. China, to this day, remains the country’s largest trading partner after all, totaling about $80 billion per year.
Has durian, a once- upon-a-time a despised fruit, now taken a king-sized step to stardom?
*** (Dejaresco, a former banker, is a financial consultant and media practitioner. He is a Life and Media member of Finex. His views here, however, are personal and do not necessarily reflect those of Finex.)