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Philippine Banana Exports Fall, Though Exports to China Now Recovering
Owing to the COVID-19 outbreak, Philippine banana exports to China have been plummeting since the beginning of 2020, with February seeing an especially large fall in export volume. This has resulted in excess domestic supply in the Philippines, causing prices to drop significantly.
According to a business-oriented WeChat public account hosted by the Chinese Embassy in the Philippines, since February this year banana exports have fallen noticeably as a result of the COVID-19 outbreak, causing sale prices to plummet from $8 per box to only $1.80. This has led to some trepidation among smaller-scale banana sellers. Other reports have indicated that the market turmoil due to the outbreak has caused some Chinese buyers to reduce or even discontinue their orders of Philippine bananas. Consequently, Philippine banana exporters may have been seeing losses of at least $5.5 million per week. If this situation continues, it may force growers to further cut down their production in order to make it through the crisis.
When looking at the Chinese market for Philippine bananas, however, the effects of the epidemic have started to subside since the beginning of March. In contrast to the situation inside the Philippines, Produce Report has learned from Chinese banana importers and wholesalers that wholesale prices for Philippine bananas in China have been steadily increasing this year. Aside from the reduction in import volume due to the outbreak, the declining production volume within the Philippines has also led to reduced export volume. Starting in the fourth fiscal quarter of last year, the Philippines has seen an excessive surplus of bananas, causing prices to fall continuously. The resulting decrease in profits has caused some banana growers to cut down on management and investment in their plantations. The quality and production volume of Philippine bananas have also both suffered owing to natural phenomena such as typhoons. The combination of these various factors has led Chinese importers to reduce their orders of Philippine bananas, causing high demand and low supply in the domestic market.
From the middle of March, domestic wholesale prices of Philippine bananas began to return to normal; with the arrival of Vietnamese and Cambodian bananas on the market, Philippine banana prices have readjusted downward. In particular, now that the epidemic is being brought under control domestically, some enterprises have started to resume normal operations and buy more bananas. Consequently, Philippine banana exports to China are slowly improving. Some industry insiders believe that there is a good chance that the situation will return to normal relatively soon. The fruit export industry has already started to improve as transportation at ports normalizes, markets and retail stores restart their business, and services such as banks and deliveries recover. According to a statement from the Pilipino Banana Growers and Exporters Association, “The disruption of banana exports to China due to the COVID-19 outbreak came out to be short-lived.”
Bananas remain among the highest-demand fruits in China, surpassed only by apples and citrus. According to preliminary reports from the Philippine Statistics Authority, last year’s banana export volume reached a record-breaking 4.38 million tons with a value of almost $2 billion. Furthermore, banana exports to China rose by 37% to reach 1.67 million tons. In 2018, China surpassed Japan as the biggest importer of Philippine bananas.
This article was translated from Chinese. Read the original article.
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