Malaysia sees spike in durian farms amid China demand

Durian investments boom as KL eyes 50 per cent jump in exports by 2030, driven by Chinese market

KUALA LUMPUR • The stinky, spiky durian is set to become Malaysia's next major export as the South-east Asian nation rushes to develop thousands of acres to cash in on unprecedented demand for the fruit from China.

Once planted in family orchards and small-scale farms, the durian is attracting investments like never before. Even property tycoons and companies dealing in palm oil, Malaysia's biggest agricultural export, are making forays into the durian business.

The Malaysian government is encouraging large-scale farming of durian, counting on a 50 per cent jump in exports by 2030.

"The durian industry is transforming from local to global, large-scale farming due to the great demand from China," said Mr Lim Chin Khee, a durian industry consultant. "Before the boom, a durian farm in Malaysia would be a leisure farm... Now they are hundreds of acres and bigger, and many more will come."

Durian may be banned in some airports, public transport and hotels in South-east Asia for its pungent smell, but the Chinese are huge fans. Durian-flavoured foods sold in China include pizza, butter, salad dressing and milk.

"At first, I also hated durians because I thought they had a weird smell," said Ms Helen Li, 26, who was eating at a shop specialising in durian pizza in Shanghai, where nearly every customer ordered the 60 yuan (S$11.90) dish during a recent lunch-hour rush.

"But when you taste it, it's really quite delicious. I think those who hate durian are scared by its smell. But once they try it, I think their opinion will change."

The Chinese pay top dollar for Malaysia's "Musang King" variety of durian because of its creamy texture and bittersweet taste. Prices of the variety, now planted all over the country, have nearly quadrupled in the last five years.

China's durian imports rose 15 per cent last year to nearly 350,000 tonnes worth US$510 million (S$700 million), according to the United Nations' trade database. Nearly 40 per cent was from Thailand, the world's top producer and exporter.

Malaysia accounted for less than 1 per cent, but expects sales to China to jump to 22,061 tonnes by 2030 from this year's likely 14,600 tonnes, as trade is widened to include the whole fruit. It is currently restricted to durian pulp and paste.

Mr Lim, the consultant, said palm oil giant IOI Corp and property-to-resorts conglomerate Berjaya Corp have approached him about making ventures into durian farming.

IOI did not respond to Reuters' queries, but a source with direct knowledge of the matter said the company was looking to plant durian on a small scale.

Berjaya, headed by one of Malaysia's richest businessmen, Mr Vincent Tan, did not respond to a request for comment.

State-owned palm oil company Felda said the agricultural ministry began planting durian on its land this year. PLS Plantations, a construction and palm plantation firm which counts property tycoon Lim Kang Hoo as a director, last month said it will buy a US$5 million stake in a durian exporter.

M7 Plantation, a private company established last year, is developing a roughly 4,000ha durian estate in Gua Musang, home to the Musang King in the eastern state of Kelantan, and is selling durian trees for RM5,000 (S$1,640) each.

"We founded the company because we see potential in the industry, the primary target being China," chief executive Ng Lee Chin said, adding that most of her buyers were from China.

The agriculture department said in an e-mail reply to Reuters: "Planting durians is not just a hobby today as durians are considered 'gold' in the agriculture industry."

Malaysia's durian plantations covered 72,000ha last year but the area under cultivation is growing, the department said, and in some areas plantations growing palm oil are switching to durian because it is seen as more lucrative.

In Sabah state, some of the land for durian farming will come from converting palm estates, its Agriculture Ministry said, adding that it was planning expansion of over 5,000ha.

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 27, 2018, with the headline 'Malaysia sees spike in durian farms amid China demand'. Print Edition | Subscribe