THE share in Asian banana exports of the Philippines, the world’s second-largest banana exporter, continued to shrink as it plunged to just 60 percent last year from 90 percent amid growing competition from neighboring producing countries.
The United Nations’ Food and Agriculture Organization (FAO) said the Philippines’s stature as Asia’s key banana exporter is now being rocked by persisting production woes worsened by stiff competition against growing banana suppliers in the region.
The FAO added that the Philippines banana exports last year plunged by 37 percent year-on-year to 2.4 million metric tons (MMT) from 3.8 MMT.
“In previous years, some 90 percent of Asian banana exports originated in the Philippines, which ranks as the second leading global banana exporter behind Ecuador, but this share fell to some 60 percent in 2021,” FAO said in its final Banana Market Review 2021 report published recently.
FAO explained that Philippine banana production continues to suffer from “severe” production difficulties brought about by the “combined impact” of the Covid-19 pandemic and the spread of Panama disease. Furthermore, the FAO explained that production woes in the Philippines were worsened by hurricane damage and high costs of planting inputs.
“This reportedly had a particularly detrimental effect on small scale banana producers in the country, who struggled to procure the necessary agricultural inputs to meet the quality requirements of export markets,” it said.
“Importers from China and Japan, the two major destinations for bananas from the Philippines, reportedly reduced their orders from smaller producers substantially due to quality concerns,” it added.
Aside from local production problems, the Philippines’s market share in Asian banana exports was challenged by growing plantations in Vietnam, Cambodia and India. The FAO explained that these three countries continue to enjoy investments in banana plantations driven by “strong” import demand from China and in the Middle East.
“All three registered double-digit growth in exports in 2021, shipping some 300 000 to 350 000 tonnes each,” the FAO said.
The FAO report revealed that the Philippines’s market share in China’s banana market shrank to 45 percent last year from the usual 50 to 75 percent of annual import volume. China, the world’s third largest buyer of bananas, accounted for 10 percent of global banana imports last year with total volume growing by 5.2 percent year-on-year to 1.9 MMT.
“On average, China typically procures some 50 to 75 percent of its total banana imports from the Philippines, but this share dropped to 45 percent in 2021 due to the production difficulties experienced in the Philippines,” FAO said.
“As smaller producers in the Philippines struggled to meet the quality expectations of the Chinese import market, traders reportedly reduced or even cancelled their orders from Philippine smallholders,” FAO added.
To address lower shipments from the Philippines, China turned to Viet Nam and Cambodia for its banana supplies, according to the FAO.
“[China’s] imports from Viet Nam and Cambodia amounted to approximately 700,000 tonnes combined over the full year 2021, a rise of nearly 200,000 tonnes from the previous year,” it added.
The BusinessMirror earlier reported that the Philippines has been losing market share for bananas in key Asian markets to neighboring countries as well as Latin American producers.
Trade map data of the multilateral International Trade Centre analyzed by the BusinessMirror showed that the Philippines’s market share for bananas in China, Japan, and South Korea has been shrinking in recent years, as domestic exporters have warned. (Related story: https://businessmirror.com.ph/2021/05/04/phl-bananas-losing-out-in-asia-to-latin-america-asean-producers/)
Despite shrinking market share in Asian banana exports, the Philippines remained as the world’s second-largest exporter of bananas for the fourth consecutive year in 2021. (Related story: https://businessmirror.com.ph/2022/05/30/phl-still-second-largest-banana-exporter-fao/)
Image credits: Ceazar Perante