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Chinese banana price could rapidly rise this year

Banana farmers are aware of regular fluctuations in the banana industry. Each cycle generally lasts around 3-5 years. In addition to normal price fluctuations, the overall banana price reaches a peak and drops to a low point every 3-5 years. Many banana farmers are already used to calculating their income based on 3-year periods. The latest cycle arguably started in 2015. The banana market conditions were great in 2014, but then declined in 2015, 2016, and 2017. The price of bananas began to rise again in 2018.

There are many factors that influence banana market conditions within each cycle: first, there is the overall surface area devoted to banana plantation. The number of banana seedlings increased in 2018-2019 as a result of the high banana price in 2018, but the effect of banana plantation expansion is not yet visible this year. The growth of banana production in Southeast Asia is limited. Second, the subsequent and overlapping supply periods from different production areas play an important role in the banana market. One of the key questions for 2019 is whether production areas can avoid to supply the market at the same time and in bulk. Excessive market supply leads to a situation where bananas become unmarketable and the price drops. Third, weather conditions are an important aspect of any agricultural industry. Banana production areas suffer from frost, typhoons, and other natural disaster, but the weather in 2019 has been quite regular.

The regular cycle in the banana industry suggests that the banana price will rise in 2019. Some people in the industry predict that 2019 will be even better than 2018.


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