Fake durian news- Why I choose to expose them now? The Coronavirus and impact on durian trade.
This year end durian season saw many twists and turns, and some fake news as well. In this article, I shall run you through several events in sequence. Hope that I can help in dispelling some of the half-truths and the untruths.
During the start of the year end durian season in mid November, the prices of Mao Shan Wang was in the range of $22- $25 / kg. The price remained at this level for a couple of weeks before it starts to soften to around $19/kg - $21/kg due to an increase in harvest in mid December.
Prices stayed pretty much at this level throughout the season till after Chinese New Year. And by mid February 2020, the price started to creep up to $22/kg - $24/kg once again due to the dwindling durian supply.
China's insatiable demand for Mao Shan Wang
One of the main reason for this consistent high price was due to the high demand from China. In the past few years, demand from China has been growing at a steady pace. I personally spoke to some major fruit distributors and many are keen to ride on this new wave to import, specifically, Mao Shan Wang into China.
Every day, we receive calls and emails from Chinese fruit traders and almost every week, we receive at least one visitor from China who wish to physically meet us at our farm or factory.
The Chinese traders have been investing heavily in Pahang and Johor to build factories with Nitrogen Blast Freezing capabilities.
This demand, combined with a modest harvest quantity, has resulted in the commodity price of Mao Shan Wang to remain at high levels pretty much throughout this year-end durian season.
Coronavirus, the impact on durian trade. Inaccurate news.
News on the Coronavirus really started just a couple of days before Chinese New Year. At its onset, Wuhan China went abruptly into a lockdown mode. This has sent shockwave and severely disrupted supply chain across Greater China. The impact is mostly felt in eastern China.
Many goods and services has been disrupted, and durian too, has not been spared.
The nitrogen blast freezing processing is a labour intensive and slow process. As such, any orders from China will potentially take weeks or even up to two months to process. When the orders got cancelled abruptly, many traders got caught off guard.
They sit on tonnes of frozen MSW which at this point, has no other markets other than in China and Hong Kong, and to an extremely limited extend, Australia.
Then the news broke, about the sharp plunge in durian prices, especially Musang King, of up to 50%. This is inaccurate. Prices did plunge, but it wasn't referring to fresh Musang King, it was the frozen whole MSWs. We did see a small drop on commodity prices of between RM2 - RM5 per kg during that period, but that was it. Overall, at farm level, prices of fresh durian was still hovering around RM38 to RM42 per kg.
You may ask, "if China stop taking, should the price go even lower?"
Theoretically yes, but in this case, the durian traders were smart. They timed their procurement of fresh durian, buying them a few tonnes at a time in order not to cause a big impact and variation to the price. So overall, the price fluctuation is small.
And thus, the disruption in China caused by the Coronavirus had only a modest impact on fresh durian prices, but it certainly had a huge impact on the price of frozen durians.
I personally heard of many of these traders facing bankruptcies as they find no markets to absorb the tonnes of frozen durian sitting in their cold room or reefer containers. And these cold room charges aren't cheap.
And then, we have the absolutely Fake News.
Then, we had this video posted and circulating around in Facebook. In this video, there a man, who, judging from his tone, sounds like the boss of this durian wholesale centre. He was commenting about a surplus of durians unable to be sold on that day.
Here's a link to that video https://www.facebook.com/allangoh333/videos/1819804631488845/
He then urge people to share this video and was willing to drop the price sharply to clear stock.
It turns out, this was an old video, ( I verified it with a fellow tradesman). So this goes to show how fake news can really affect peoples' perception of the real situation.
Fake news is serious not just in politics but in business as well. When CNA and Straits Times ran that article, we had customers coming to our store daily and asking why our prices did not drop in tandem with the news reporting?
At that point, we also really don't what to say, because we can talk reason, but reasons and emotion seldom mix well. The reasons we give will be instantly dismissed by customers as untruths and we'll be seen as dishonest and just trying to profiteer.
It's simple, in the eyes of a typical customer, who's more credible? Major News Media, Facebook post or the empty words of an individual durian seller? The answer is clear.
Therefore, I choose only during this off season, when there are absolutely no more durians, to share an afterthought.
Hope that my article can shed some light to the situation.
In the coming months, the durian trade, like many other F&B businesses, will be badly hit. Many corporate durian parties will be cancelled. We have already received a few cancellation. China's demand will also remain slow. On top of that, there will be a 2-3% increase in harvest from new plantations that were started years ago. The good news is, prices of durians are expected to be low this year.
I welcome any comments. I promise I will read every single one of them. Or if you like to contact me directly, you can email to firstname.lastname@example.org