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Chinese merchants to explore southern market in the next few years

Laos: Banana price advantage is gradually eaten away by rising costs

Laos is located in the tropics and adjacent to China. It is one of the most suitable areas for banana cultivation, with a low cost base, clean land, and business-friendly policies. More and more Chinese banana companies are starting to invest in banana farming in Laos. After more than ten years of development, Laos' current investment environment and planting pattern have changed considerably over the last decade, with rising costs rise, blight disease and port congestion. But, although there are risks and difficulties, there are still many banana investors who can find opportunities.

Nowadays, investing in bananas in Laos has to take into account the cost of land rentals, agricultural materials, labor and freight. When arriving at customs, the cost per acre of bananas is about 5,000-7,000 yuan. Such a cost price doesn't have significant advantage over Guangxi, and is slightly higher than that of Zhanjiang and Yunnan in Guangdong. Aside from the cost factor, the greater advantage of banana farming in Laos lies in the climate. Due to the mild climate, the listing periods of bananas are more flexible.

The rapid expansion of the banana area in Laos is due to foreign investment - most of the larger banana plantations in the region are backed by Chinese or Vietnamese capital. At present, Chinese money is mainly concentrated in the fields of Houayxay, Nantun, the Golden Triangle, Luang Prabang, Udomsey, Vientiane and Bandung. At its peak, the banana planting area in Laos has grown to more than 400,000 mu. In recent years, many traditional planting areas are deteriorating due to the impact of blight. At present, the banana planting area in Laos is about 250,000 mu.

Source: Agricultural Finance Network Banana


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