Drought and disease has caused banana yields in the Philippines to drop, setting off a chain reaction which sees banana wholesale prices in Japan soar, as importers are having to compete with buyers elsewhere for access to less-familiar sources.
The fruit is now selling for 2,850 yen ($26) per 13kg carton on the wholesale produce market in Tokyo's Ota Ward. Japan in April imported 69,725 tons of bananas from the Philippines at an average price of 112 yen per kilogram -- 10% higher than a year earlier. That jump in import prices has spread to wholesale prices as well, raising them nearly 10% over the past week.
The global El Nino weather pattern has brought drought to the southern Philippine island of Mindanao, a center of banana production. The crop is also suffering from Panama disease. "Supply is wholly insufficient," an intermediate wholesaler at the Ota market said.
New sources
Traders are now scrambling to diversify their banana sources. Imports from Ecuador, Japan's second-largest supplier of the fruit, grew by a factor of 2.5 to 14,661 tons in April. Those from Guatemala rose to 1,210 tons, 1.5 times the year-earlier level. Yet these were unable to fully offset the Philippines' shortage. Japan's total banana imports dropped 7% to 87,947 tons.
It is unclear whether bananas from places other than the Philippines will catch on in Japan. Retailers continue to request the crops they are accustomed to. When Latin American imports surged for a time in 2015, Ecuadorian bananas tended to pile up at the distribution stage. "We will decide whether to take on more fruit from Latin America and elsewhere after taking a close look at consumption," the intermediate wholesaler said.
Mainline offerings are currently selling for around 200 yen a bunch in stores -- about the same as a year ago. But "we'll be forced to hike prices if supply drops any further," a representative of a Tokyo supermarket said.
The Philippines' banana crop acreage has dropped 20-30% since 2012, when typhoons flooded a number of orchards. Yet demand for the fruit is on the rise in the Middle East, China and South Korea, ramping up competition for limited supply. Japan now purchases 30-35% of the Philippines' output, compared with 90-95% in the past. As global demand keeps climbing, prices likely will too, even over the long term, a representative at an importer said.
Source: asia.nikkei.com
