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Philippines: Banana Exports Down 18.3% on Weak Production

19.2.2021

Last year, Philippine banana exports declined by almost a fifth to a two-year low of 3,595 million metric tones (MMT) as shipments across all critical markets contracted due to weak domestic production.

Preliminary Philippine Statistics Authority (PSA) trade data analyzed by the BusinessMirror showed that the total banana exports last year was 808,000 MT lower (18.35 per cent) than the record-high 4,403 MMT in 2019.

PSA data also showed that export receipts from banana shipments in 2020 declined by 20.6 per cent to $1.552 billion from $1.953 billion.

Due to the double-digit reduction in value, bananas dropped a notch to the sixth spot of the Philippines' top export products, PSA data showed.

Pilipino Banana Growers and Exporters Association (PBGEA) attributed the decline in exports to 'poor production' caused by the rapid spread of diseases worsened by bottleneck logistics such as movement restrictions against Covid-19.

The country's banana output last year fell by 1.1 per cent to a three-year low of 9,056 MMT, about half of which are cavendish, from 9,157 MMT in 2019, PSA data showed.

'There was a lot of wastage production. The decline in both volume and value was expected despite the demand for fresh fruits, including bananas in foreign markets,' PBGEA Executive Director Stephen A. Antig told the BusinessMirror.

Antig explained that the spread of diseases, such as Fusarium wilt, in farms '[was] left unattended.'

The production situation was worsened by 'forced work stoppage/disruptions mainly because of the restrictions imposed by local government units,' Antig added.

He added that difficulties in crossing borders between LGUs resulted in a 'slow flow' in the transport of fresh bananas from farms-to-packing houses-to-ports for loading. Antig pointed out; it affected the quality of the fresh bananas for export.

'Not promising' outlook

For this year, the outlook for the country's precious yellow fruit export would 'not be promising,' Antig said, as other banana exports have 'easily filled-in the supply gaps' that the Philippines created in its key markets.

'We also need to double-time overhauling the production areas severely affected by diseases. We are keeping our fingers crossed, though we will withstand the pandemic, hopefully with government's interventions,' he said.

PSA data showed that the country's banana exports to its key markets, such as Japan, China, South Korea, and Saudi Arabia, posted declines in both volume and value.

PSA data showed that shipments to China, South Korea, and Saudi Arabia declined by at least 25 per cent to as much as 30 per cent.

Japan regains top spot.

Despite a 4-per cent year-on-year reduction in volume, Japan regained its position as the Philippines' top market for banana exports from China, which held the spot for two years since 2018. 

PSA data showed banana exports to Japan reached 1,345 MMT, 18 per cent higher than the 1,139 MMT volume shipped to China last year.

The country's banana exports to China, mostly supplied by small to medium domestic banana growers, declined 29 per cent from 1,603 MMT in 2019, based on PSA data.

Antig told the local press in November 2020 that Japan edged the Chinese market due to the country's banana quality advantage that Japanese consumers prefer.

But in a recent interview, Antig explained that since China started buying bananas from nearer sources such as Vietnam, Laos, Cambodia, Filipino exporters to the East Asian market lost contracts and incurred losses decline in export prices.

'The China market is dominated by small Filipino banana exporters. When the bananas from China's other sources were available, the price for Philippine bananas went down, which hurt many Filipino exporters,' he said.

'That is usually the situation when there is oversupply. Most of the small exporters rely on the spot market price. No contracts. They sell directly to Chinese consolidators,' he added.

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