The coronavirus outbreak has stymied the durian economy. Demand for the king of fruits has dipped dramatically amidst widespread city lock-downs and logistics disruptions in China, resulting in durian prices falling by as much as 50%—traders in Raub reported that prices for the Musang King has reduced from RM60 to RM30 per kg. The durian tourism industry has also been hit hard, especially following Malaysia’s temporary travel ban on Chinese nationals from all provinces currently under lock-down.

Unsurprisingly, farmers are becoming wary about processing their durian crops to China, and are beginning to look for alternatives locally and in Singapore. Their hesitance is justifiable—as explained in our previous post on the durian economy (see image below), China is expected to import from Malaysia USD120 million worth of durians annually, with approximately 23% of Malaysia premium-grade output exported, amounting to 75,000 tonnes to China in 2018. Overall, Malaysia reports RM173.3 million (about USD41.9 million) worth of durians in 3Q2019 exported around the globe, the highest quarter of recorded since 2015.

The drastic slowdown in durian imports from China would mean a lot of unwanted durians left in the traders’ storage. Overall trade with China in containers is down 20% or more in recent weeks and some may be affected by about 50% of airfreight volume supply cancelled (and expectations of elevated air freight rising significantly*).

There is some sliver of hope, however. CNA pointed out that the decreased demand in China was due to the outbreak itself—interest in the prickly fruit is still there, albeit just not the right time for a hearty durian meal. The Pahang Fruit Farmers’ Association has expressed optimism that the outbreak could be contained by the time the durian peak season (April to August 2020) comes around.

Until then, the Malaysian durian farmers (together with other fruits farmers in Myanmar, Thailand and Vietnam and beyond) will have to continue to keep calm and carry on, at least until the storm of the coronavirus blows over.

Check out Khor Reports’ Durians for China: A Preliminary View and Dashboard.

*Loadstar.com in its article ”The calm before the 'supply chain storm' when China's air freight rates soar,” points to 300-400% rise in airfreight rates once production is back on full and “before belly traffic returns to the country.”