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Banana Glut Swamps Vietnam as Exports to China Decline

January 22, 2024

According to Vietnamese media reports, a number of banana stalls have recently sprouted up on the streets of Ho Chi Minh City, with vendors selling bananas originally intended for export at a low price of 6,000 Vietnamese dong ($0.24) per kilogram.

The bananas are said to originate from Dong Nai, Vietnam’s top banana producing province. The current situation with bananas being sold at low prices on the domestic market has been ascribed to difficulties in exporting the fruit to China. Sales are reported to be sluggish, with it taking each vendor at least two days to sell one metric ton of bananas. Meanwhile, prices continue to fall.

According to the general secretary of the Vietnam Fruit and Vegetable Association, Dang Phuc Nguyen, bananas are Vietnam’s third-largest fruit export to China, trailing only durians and dragon fruit and accounting for approximately 10% of the country’s total fruit and vegetable exports to the Chinese market. At the end of 2022, Vietnam and China signed an official export protocol allowing Vietnamese bananas to enter China through normal trade channels. This encouraged many farmers to expand their banana planting areas.

In the first 11 months of 2023, Vietnamese banana exports to China were on the rise and eventually surpassed the $270 million mark. However, demand began to fall in December as a result of milder winter temperatures in China leading to an adequate supply of domestically grown bananas. In addition to the decreased market demand, countries such as Laos, Cambodia and the Philippines, which also supply bananas to China, have been continuously seeking to expand their presence on the market, fueling greater competition. Consequently, at the beginning of 2024, Vietnamese banana shipments to China dropped by nearly 40% compared with the same period of last year.

The current banana purchasing price at farms is reportedly just 1,000–2,000 dong ($0.04–0.08) per kilogram, which leaves growers facing considerable losses. It is projected that Vietnam will need to continue dealing with the banana oversupply issue for the next one to two months.

Image: iStock

This article was based on a Chinese article. Read the original article.

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