How the demand for durian pushes up coffee prices

At first glance, these markets do not overlap, but in Southeast Asia they are brought together by the simple economy of farm choice. Where either coffee or a more marginal fruit can be grown on limited land, villagers increasingly choose durian — primarily due to the soaring demand in China and attractive prices for fresh fruit and frozen pulp. 

Coffee, especially robusta, which the region supplies in huge volumes for instant coffee and espresso mixers, is losing out on competition for land, water, labor and investment. When part of the coffee plantations are repurposed as durian gardens, a supply gap is created in the global market: grain becomes less and demand in coffee shops and food industry does not disappear anywhere — the result is an increase in price. 

Also, coffee crops (and especially the same Robusta in Vietnam) are increasingly affected by droughts and climate stresses, which further pushes farmers to durian, which allows them to reduce risks and get better incomes.

 It is important to understand that the relationship is indirect and heterogeneous in space: not all coffee exporting countries switch to durian in bulk at the same time, and not every region is equally suitable for both crops. Vietnamese Central Highlands, part of Thailand or Peninsular Malaysia — are different in terms of soils, humidity and Chinese market access policy, so the extent of substitution varies. In addition, durian is not a «risk-free alternative: it is sensitive to excess moisture during the flowering period, depends on effective pollination, requires capital-intensive investment and faces regulatory barriers to exports. If these risks materialize, the farming economy may swing back towards coffee — but the inertia of gardening is great and trees will not be replanted in one season.

There are also mitigating strategies. Some producers switch to agroforestry: coffee remains under the shade of trees, and durians are planted as the upper tier; this is how the farm diversifies incomes and stretches risks over time. Others store coffee in better areas, and durian — on the periphery, or combine with mango and avocado. 

Public policy — drip irrigation loans, crop insurance, support for processing — can slow down too sharp outflows from coffee and even out price «slides». As a result, the link between the durian boom and the more expensive coffee — is a chain of three links: competition for resources, time lag of gardens and climate volatility. It is neither mechanical nor universal, but strong enough to be felt on the stock exchange and in check for lattes. The longer the high demand for durian and favorable prices for it remain, the greater the incentive for the agricultural sector to maintain this reorientation — and therefore to keep coffee in the zone of increased value.

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