Japan’s ongoing love affair with Philippine bananas

By Jeremaiah M. Opiniano / Special to the BusinessMirror

TOKYO, JAPAN—Ripe bananas wrapped in clear plastic entice Japanese consumers at a Maruestu supermarket outlet in Ichigaya area. Even if labels are written in kanji letters (to the bewilderment of non-Nihongo fluent Filipino tourists), these yellow fruits are packed with brotherly love from a Southeast Asian neighbor.

Bananas are synonymous to the Philippines. Not even drought and soil-related issues in the last few years can stop the Philippines from collaring 90 percent of the Japanese market for bananas, now the East Asian nation’s most preferred fruit.

Japan tinkered with getting supplies from other countries farther than the Philippines, like top producer Ecuador, Vietnam, or Mozambique. But the Philippine banana is a Japanese fixation.

President Duterte and his economic managers tried to secure this fort in the Japanese fruit-eating market during a state visit last week in Tokyo. One of two deals all but secured the Philippine foothold of the Japanese market: starting 2017, 20 million boxes of Cavendish bananas will be imported courtesy of Farmind Corp., worth at least P10.6 billion if this volume will be shipped annually.

Farmind Corp. alone collars 30 percent of the import market in Japan. A competitor, Sumifru Corp., a subsidiary of Sumitomo Corp., also gave a letter of intent to the Philippine trade department to increase its investments, targeting its Davao region operations. Sumifru also supplies about 30 percent of the bananas sold in Japan, according to Sumitomo.

Huge fans

The Japanese do love Philippine bananas, the country’s agricultural attaché in Tokyo, Dr. Samuel Animas, told the BusinessMirror. And the prospective investment deals with Sumifru and Farmind will secure the country’s continued dominance of the Japanese banana market, Animas added.

Bananas started to become a Japanese craze after the World War II. These fruits grow best in tropical countries, like the Philippines. And the geographical proximity of the Philippines is as an advantage as local producers could send fresher bananas to Japan.

Japanese trading companies had invested in Philippine banana plantations since the 1960s, especially those located in banana-rich Mindanao. These initial investments, like that of Sumifru, were scaled up since the 1980s given rising demand from Japanese customers.

From 2002 to 2012, Philippine bananas imported by Japan soared from 743,500 metric tons (MT) in 2002 to 1.027 million MT in 2012, according to the latest Banana Market Review and Statistics report of the Food and Agricultural Organization (FAO).

According to the Philippine government data, Japan imported 605,492 MT of bananas amounting to $277.035 million in 2015. Government data showed that Japan accounts for more than 30 percent of the Philippines’s total banana exports annually.

New consumers

The Japanese’s love affair with bananas has turned generational as the fruit is also a hit to the new crop of customers—the working class who are always on the go and want ready-to-eat meals upon coming home. For this new generation of consumers, Animas said the banana is sweet and is easy to consumer.

“The Japanese want to slice their fruits right away. Everything should be convenient,” Animas said.

Japan Times reported in March that the banana lords it over other fruits as its status in Japan is seemingly “guaranteed by economics and convenience,” especially to young people.

A 2014 survey by the Japan Banana Importers Association showed that Japanese consumers ate bananas regularly; at that time, the price of the fruit was ¥350 per kilogram (around P150 at ¥100 = P0.43), higher than the previous price of ¥190. Toyo Keizai, a Japanese business magazine, wrote Japanese households consume 18 kilograms of bananas a year. Mandarin is a far second with 13 kgs.

Still, compared to other fruits, bananas are cheaper, wrote a March 2016 report by Japan Times. That is even if prices jacked up in 2014 due to consumption tax on bananas, the lower value of the yen, and a soil bacteria that previous typhoons had spread struck the country’s banana plantations from 2010 to 2013.

The Japan market had helped made the Philippines a fast-rising banana exporter worldwide, which Latin American banana powerhouse Ecuador continues to dominate. A third of global banana exports come from Ecuador.

Accoding to 2015 data from the web site World’s Top Exports, the Philippines is the seventh-highest grosser in banana exports proceeds, with $439.9 million (4.6 percent of the global total exports revenues). Ecuador, Belgium, Costa Rica, Guatemala, Colombia and the US are the top-grossing banana-exporting countries in 2015.

In terms of production, the 2012 data of FAO (the most recent one available) noted that the Philippines is the third-largest banana producer (behind India and China), with 9.225 million MT, valued at $2.337 billion.

If Philippine bananas are in short supply, importers buy from Ecuador just to meet their quota and avoid incurring penalties, according to Animas. Because of diseases and other logistical issues plaguing local producers, Japan was forced to turn to other importing countries. Apart from Ecuador, Vietnam and Mozambique also export to Japan. Indonesia started exporting bananas to Japan in 2015.

But Japan is not the only target market of the Philippines for bananas. The top 2 other target markets are China and South Korea. In 2015 China accounted for 23 percent of the total Philippine banana exports, or 447,915.102 MT, valued at $157.499 million, according to the Philippine Statistics Authority (PSA). In the same year, South Korea imported 212,083.973 MT of Philippine bananas amounting to $89.986 million.

China previously banned some Cavendish banana exporters as their shipment was found to contain chemicals exceeding Beijing’s limit. The ban was lifted during President Duterte’s state visit to China two weeks ago.

South Korea is the third-leading destination market. But Seoul’s more stringent pesticide regulation threatens Philippine banana exports to South Korea.

This is not the case in Japan, which has stringent food-safety regulations, as Philippine bananas meet Tokyo’s maximum residue limit (MRL) for various pesticides,
Animas said.

“Japan is a very good market for food products in terms of food safety,” Animas told the BusinessMirror. “Other countries may be target markets, including those countries whose MRL is not so strict. But since [banana producers and exporters] want Japan, they would rather follow regulations because they can earn more from the Japanese market.” With a report from Jasper Emmanuel Y. Arcalas

Jeremaiah Opiniano is the publisher of The Filipino Connection, a community news
organization in Batangas.

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