SOURCE: Jie Shuyi, Yicai Global
The Philippines may soon no longer be China’s biggest banana supplier as exports to the country sank 25 percent last year from the year before amid surging production costs and lengthier transport times, giving other banana exporters the chance to seize market share.
It used to take one to two weeks for bananas from the Philippines to reach China but this has been lengthened considerably due to the pandemic’s impact on sea freight, Yang Zhenyu, general manager of Dole China’s Fresh Food division, told Yicai Global. It is now quicker to bring in bananas from neighboring countries such as Cambodia, Laos and Vietnam, which can arrive in as little as three days.
The Philippines was the first foreign country from which Chinese fresh produce distributor Goodfarmer Foods Holding Group started to import fruits back in 2011, said Zhang Jingzhen, general manager of its fruit division. But now almost half of the Shanghai-based company’s banana imports are from Ecuador, the world’s largest banana exporter, as the Philippines does not have enough supply.
Vietnam and Cambodia will become bigger exporters to China, according to market insiders. Cambodia is less stable politically than the Philippines so which countries will be its biggest rivals has yet to be determined. But price is a major consideration for fruit traders.
“In recent years, rents and labor costs have gone up in the Philippines, with less suitable land available to plant bananas,” Zhang said. Panama disease and a lack of workers caused by Covid-19 have also hammered exports, he added.
Faced with such stiff competition and internal problems, the Philippines exported 36.5 percent less of the fruit last year from the year before at 2.4 million tons. And the value of exports slid 31 percent to USD1.1 billion, according to the Philippine Statistics Authority.
There has been an unprecedented leap in costs, such as fertilizer, kraft paper and plastics, the Philippine Banana Growers and Exporters Association said. Shipping costs have doubled due to the worldwide container shortage brought on by uneven trade during the Covid-19 pandemic.