Racing to plant "billion dollar trees"

Completely dependent on the Chinese market, but after only one year of official export, Vietnamese durian has become Vietnam's new "billion-dollar tree" when the turnover in 2023 reached about 2.3 billion USD.

The price of durian has skyrocketed, becoming a super expensive commodity. Currently, the price of durian purchased at the garden ranges from 125,000-200,000 VND/kg. Thanks to that, durian farmers in the past year were able to earn a profit of 1.2-3 billion VND/ha depending on the time and productivity. This is a super-huge profit, which is difficult for any agricultural product in our country to achieve at present.

Therefore, farmers in many provinces and cities are competing to expand the area of ​​this "billion-dollar tree". According to the Department of Crop Production (Ministry of Agriculture and Rural Development), the total durian area in 2023 in our country is estimated to reach 131,000 hectares, an increase of 20% compared to 2022.

When talking about the profits of durian trees, Mr. Doan Nguyen Duc (Bau Duc) - Chairman of the Board of Directors of HAGL (HAG) - admitted that this is a crop that "returns 5 times its original value". This surprised even him.

Mr. Duc said that his company has planted 1,200 hectares of durian, of which 700 hectares were harvested in October and November. His company has just sold about 440 tons of durian at a price of nearly 100,000 VND/kg, earning tens of billions of VND.

“My durian buyers are all big customers in China,” Mr. Duc shared. This year, he estimates the harvest will reach several thousand tons. The harvested durian will be sold directly to Chinese importers without going through intermediaries.

HAGL is planting more durian with the goal of reaching a total area of ​​2,000 hectares by 2026.

According to the content approved at the Extraordinary Congress, HAGL Agrico (HNG) of billionaire Tran Ba ​​Duong also decided to "make a big deal" in Laos when calculating to invest 18,000 billion VND to grow bananas, durian, raise cows..., with an expected profit of 2,450 billion VND/year.

The project investment completion time is from 2024 to 2028. For durian trees alone, HNG estimates that the export output after completion will be up to 9,500 tons/year.

As a large rubber enterprise, since 2018, Dak Lak Rubber Investment Joint Stock Company (DRI) has begun to shift its investment to other crops, including durian.

Notably, DRI's recently released consolidated financial report for the fourth quarter of 2023 showed revenue of VND148 billion - a slight increase over the same period, including revenue from durian. This is the first quarter that DRI has recorded revenue from durian - an agricultural product that attracted attention last year when prices reached a historic peak and remained high, bringing in USD2.3 billion to the Vietnamese agricultural sector.

According to DRI's records, with a cost price of only 365.4 million VND, DRI's durian segment is giving a performance of up to "1 capital 6 profits".

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Vietnam's durian market share in China has increased sharply. Chart: Tam An.

Durian sold at 30,000 VND/kg is still profitable

Sharing about the durian market, Mr. Doan Nguyen Duc acknowledged that in the next 10 years, durian will not be enough to meet consumer demand. This is also the reason why HAGL plans to expand the durian acreage in the coming years.

According to Mr. Duc, durian is a perennial tree, it takes 6-7 years to bear fruit. In particular, durian is a difficult tree to grow, not all regions can grow it to produce good quality fruit. He cited China as an example, which has tried to grow it but has not been successful.

“Currently, China is still the country that eats the most durian, other countries are just starting to learn about it. Therefore, I am sure that the market is getting bigger and bigger, even if we planted it all over Vietnam, it would not be enough to sell,” he emphasized.

Mr. Duc also pointed out that durian is not only eaten fresh but can also be processed into countless other products such as durian tea, durian ice cream, durian cake, durian moon cake. In China, people even make durian hotpot. Therefore, durian will become a relatively unique source of raw materials for the food processing industry. That is why durian is always expensive.

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Farmers are making huge profits thanks to sky-high durian prices. Photo: Dak Nong Newspaper

With the current output (20-30 tons/ha - PV), Mr. Duc calculates that durian price only needs to be 30,000 VND/kg for growers to make a profit.

Mr. Dang Phuc Nguyen - General Secretary of the Vietnam Fruit and Vegetable Association - believes that in the next 10-20 years, Vietnamese durian will still "live well". Because, with 1.4 billion people, China is still the world's largest durian consumer market.

According to statistics from the Chinese Customs Department, in 2023, the country will spend 6.7 billion USD to import 1.4 million tons of durian, an increase of 72.9% in volume and 65.6% in value compared to 2022.

Notably, in 2023, China spent 2.1 billion USD to buy 493 thousand tons of durian from Vietnam, an increase of 1,036% in value and 1,107% in volume compared to 2022. Accordingly, the market share of Vietnamese durian in China's total imports increased sharply from 5% in 2022 to 34.6% in 2023.

Previous forecasts show that China is still the world's largest durian consumer market, with a capacity that could reach 20 billion USD by 2025.

Currently, there are four countries that are allowed to officially export durian to China. However, according to Mr. Nguyen, Vietnam has more advantages because of the short transportation distance. In particular, Vietnamese durian is harvested almost all year round, while rival countries only have it seasonally.

In addition to fresh whole fruit, the Ministry of Agriculture and Rural Development is also completing procedures to sign a protocol to export frozen durian to the Chinese market. This means that businesses can take full advantage of preservation and solve seasonal problems to boost exports to this market, keeping durian prices more stable.

"If the protocol for exporting frozen durian is signed, a container of frozen durian will have a value many times higher than that of fresh whole fruit," emphasized the leader of the Plant Protection Department (Ministry of Agriculture and Rural Development).

China spent $2.1 billion on a fruit from Vietnam China spent about $2.1 billion on a famous fruit from Vietnam last year. Thanks to that, this fruit has become a super expensive commodity, helping tens of thousands of farming households earn billions after just one harvest.