FILIPINO exporters expect banana shipments to drop by as much as 40 percent in terms of volume this year as output is drastically reduced by Fusarium wilt and climate change, with the aggravating impact of Covid-19 on trade.
Pilipino Banana Growers and Exporters Association (PBGEA) Executive Director Stephen A. Antig said the 40 percent reduction is a worst-case scenario, considering the extent of damage to plantations by Fusarium wilt or Panama disease, coupled by the drought experienced in Mindanao.
Antig estimates that 20 percent of the country’s area planted to bananas have been damaged by Panama disease. As of March, he said, the disease has already affected about 30,000 hectares to 40,000 hectares of banana plantations in Mindanao.
Worse, Antig said the unfavorable weather conditions, particularly the drought in Mindanao, is adversely affecting local banana production.
He explained that the lack of rainfall—it should have started already, he noted—would impact small and medium growers without access to irrigation facilities.
“[The 40 percent reduction] is possible. And I hope it is already the worst-case scenario,” Antig told the BusinessMirror in a phone interview.
The country’s banana shipments in 2019 reached a record-high 4.4 million metric tons (MMT), which was valued at nearly $2 billion, Philippine Statistics Authority (PSA) data showed.
Antig said a best-case scenario would be a 20 percent to 23 percent reduction in export volume, which he noted was “not bad,” given all factors affecting the industry today.
Nonetheless, Antig said they hope the Philippines could maintain its stature as the world’s second-biggest producer of bananas despite the foreseen reduction in output.
He explained that other banana-exporting countries, particularly Ecuador and other Latin American nations, also face trade challenges due to Covid-19.
First-quarter figures
Philippine banana exports in the first quarter grew 10.71 percent to 1.18 MMT from 1.066 MMT, PSA data obtained and analyzed by the BusinessMirror showed.
PSA data also showed that value of total exports during the period grew 1.73 percent to $489.154 million from $480.805 million.
The Department of Agriculture (DA) claimed that the value of banana exports in the first quarter grew on the back of the “increase in buying prices” by Chinese importers.
However, preliminary PSA data showed that banana exports to China, the country’s top market, fell 22 percent to $129.354 million as volume declined 20 percent to 312,008.608 MT.
Antig said banana exports in the first quarter managed to grow due to higher shipments to Japan and Middle East. Antig added that exports to China declined due to erratic prices in the spot market coupled by the temporary shutdown of the market due to Covid-19.
PSA data showed exports to Japan grew 27 percent to nearly 400,000 MT. In terms of value, banana shipments to Japan rose 25.3 percent to almost $200 million. Japan overtook China as the top buyer of Philippine bananas during the quarter.
Total banana export volume to the Middle East during the three-month period grew 66 percent to 276,794.294 MT while value rose 26.8 percent to $77.617 million, PSA data showed.
Economist Pablito M. Villegas said the increase in overall exports in the first quarter was “insignificant” considering that total shipments grew 80 percent during the January-to-March period of 2019 against the 2018 period.
“Expect full-year banana exports to decline due to drought and impact of Panama disease,” Villegas told the BusinessMirror.
Antig said Japan could become the country’s top export market this year if prices in China remain too volatile due to fierce competition with Ecuador.
Antig explained that spot market prices for bananas bound to China reach as high as P540 per box due to the logistics problem encountered by other fruit suppliers to China.
Antig added that spot market prices are now declining to as low as P200 per box as other export countries, like Ecuador, resume banana shipments to China.
Image credits: Nonie Reyes
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