The exotic fruit market is in turmoil. Durian, the notoriously pungent ‘king of fruits’, has seen its wholesale price crash by 40% in London this week after Malaysia slapped a retaliatory 200% export tariff on shipments bound for the UK. The move, part of an escalating trade dispute over British biofuel standards, has left importers scrambling and the Treasury nervously eyeing its inflation forecasts.
For the uninitiated, durian is a niche but high-margin commodity. A single premium Musang King fruit can fetch £80 in Harrods. But now, Malaysian exporters are diverting stock to China, leaving UK buyers with a glut of lower-grade fruit that nobody wants. ‘The market is broken,’ said Jameson Fok, a commodity trader at Marex. ‘We’ve got containers sitting at Tilbury with rot setting in. The yield curve on durian futures has inverted.’
This is not just a problem for adventurous foodies. The Bank of England’s preferred measure of core inflation, which strips out volatile items like food and energy, suddenly looks wobbly. Durian may be a tiny component of the CPI basket, but its price collapse signals deeper trouble in global supply chains. The Malaysian ringgit has weakened 5% this month, and capital is fleeing emerging markets.
Chancellor Rachel Reeves is said to be concerned. A Treasury source told me they are ‘monitoring the situation closely’ and have activated contingency plans to stabilise the fruit and vegetable import sector. But what can they do? Subsidise durian? The thought is absurd. This is a market correction, pure and simple. Government intervention would only distort prices further.
Meanwhile, the gilt market is jittery. The 10-year yield edged up 2 basis points this morning on fears that the trade war could spread to other agricultural goods. Palm oil, rubber and even tea are at risk. If Malaysia retaliates further, the UK’s current account deficit will widen, and sterling will take a hit.
For investors, the lesson is clear: diversify. The days of easy returns on exotic assets are over. The durian bubble has burst, and the smell is not pretty.
