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Banana Exports from the Philippines May Drop 40% Amid Coronavirus

17.4.2020

Banana exports from the Philippines may drop 40% from 4 million tons to 2.5 million tons this year because of pandemic lockdowns and social distancing measures that have curbed cultivation and transport,

As the second largest exporter of bananas, the Philippines accounted for 20% of global banana production and 90% of total exports to Asia, according to a report from the Food and Agriculture Organization of the United Nations. Ecuador is the biggest banana exporter.

To avoid shortages and price hikes, Philippines Agriculture Secretary William Dar urged local governments to allow employees from agriculture and food processing facilities to return to work. If the lockdown is eased, it could result in boosting banana exports to 3 million tons this year.

Dive Insight:

The anticipated decline in banana exports from the Philippines will have currently have less impact on the U.S. as the country's bananas are primarily imported from Guatemala (40%), Costa Rica (18%) and Ecuador (15%), according to the USDA. However, markets in China and Japan, who import a vast majority of their bananas from the Philippines, could feel the squeeze. 

"Bananas have to be harvested every day," Alberto Bacani, president of Unifrutti Philippines, told Bloomberg. “By the time we come back, a lot of that fruit will be spoiled and will have to be thrown away.”

Although the Philippines may suffer crop losses because workers can't harvest bananas, there are other countries where suppliers and countries can source the fruit. China, in particular, could do so internally as it is one of the world’s largest banana producers, according to data compiled by the United Nations. 

However, if suppliers do begin to look to other sourcing options, they could run into similar issues they are encountering in the Philippines. Central America, where a large proportion of the world’s bananas are grown, is subject to similar lockdown measures. The Guatemalan government has closed borders, instated curfews and prohibited travel between the departments of the country. In Ecuador, all flights are currently banned, according to Democracy Now.

Without authority from governments to lift these quarantine measures, there is a strong likelihood that there will be fewer bananas to export, which will result in larger price tags for consumers as suppliers and growers try to bridge the financial gap that could be detrimental to their economies. In Ecuador, the largest overseas exporter, bananas account for one-third of total global banana export volume and 47% of the county’s total agricultural export value, according to 2013 values compiled by the United Nations. Bananas comprise 20% of the country’s total agricultural export value in the Philippines.

Bananas are not the only fruit at risk due to lockdowns and quarantine. The U.S. government may find the country’s agricultural production is similarly stunted after placing limitations on guest worker visas. More than 77,000 H-2A visas were approved in March and April of last year, which made up almost 28% of all such visas certified in 2019, according to U.S. Department of Labor data cited by Reuters. Already, there are farmers worrying the limits placed on workers looking to obtain these visas will result in crops rotting unharvested in the fields. Similar to the fate of bananas, if the spring harvests in Florida and California are lower than in previous years, grocery stores will have to compete for products, which will, in turn, drive up prices for consumers.

Importing from other locations may also turn out to be a non-existent solution. Countries from Guatemala to France are all weathering closed borders and restricted movement that is creating labor shortages and leaving crops unharvested. If agricultural workers are not permitted to access fields and shipping and transportation avenues are not opened, there could be long-lasting effects on what the public is able to purchase and consume.

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