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As Costs Rise, PHL Exporters Eye Japan Banana Price Hike

19.11.2021

Filipino banana exporters are proposing that the government initiate talks with Japanese retailers to increase their prices to offset rising production costs and keep the profit margins of local growers healthy.

In a letter to Philippine Agricultural Attache to Japan, Jose I. C. Laquian, the Pilipino Banana Growers and Exporters Association (PBGEA), sought the government's support in requesting higher prices for Philippine bananas sold in the Japanese market.

The move, the PBGEA argued, would help the local banana industry cope with many challenges it faces today, including disease outbreaks and rising production costs, among others.

'To continue offering a product with high-quality standards that is compliant with market requirements, the Philippine banana industry is therefore seeking the support of the Philippine Government. It will be done through the embassy to request Japan to adopt a higher pricing policy in retail stores and supermarkets to offset the spiralling inflationary costs,' the group said in its letter.

Citing Japan's Ministry of Internal Affairs and Communications data, the PBGEA noted that the purchasing price of bananas in the East Asian country for the past seven years has remained flat at about $2.36 per kilogram while production costs have constantly risen in recent years.

'Production costs have increased substantially over the last seven years with this year being the most substantial, but market prices have not,' the group told the local press.

Aside from disease outbreaks, the group said it is now facing Covid-19 pandemic-related problems such as rising freight costs and stiffer competition from Latin American and Southeast Asian banana producers in key Philippine banana markets.

The PBGEA said it had seen an 'unprecedented increase in crucial inputs such as fertilizers by 100 per cent; kraft paper, used for boxes, by 53 per cent; plastics by 65 per cent; and maritime freight by more than 100 per cent due to the global shortage of containers.

Some of the initiatives proposed by the PBGEA include the possibility of government-to-government talks about the matter and discussions with relevant industry associations, including the Japan Retailers Association, Japan Chain Stores Association, Japan Supermarkets Association and National Supermarket Associations.

'Please be informed that our Latin America competitors have already taken the same initiatives to ensure the sustainability of the banana industry in their countries,' it said.

Philippine Statistics Authority (PSA) data showed the country's banana exports to Japan from January to August declined by 40.3 per cent to $309.470 million from $518.062 million in the same period last year.

Volume-wise, banana shipments to the East Asian country declined by 42 per cent to 599,929.947 metric tons from 1.034 million metric tons recorded in the eight months of last year, based on PSA data.

 

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