Vietnamese suppliers face challenges from Cambodian bananas

Although Vietnam experienced a rainy season from April to October, the banana production went quite well. The size and quality of the bananas are both reasonable. For one exporter, the price recently dropped down very quickly because of oversupply in the market.

Mr. Nguyen Huu Thien is the vice director of a Vietnamese banana exporter Hand & Hand co., Ltd. “The banana price went down very quickly lately, much quicker than anyone expected. At the moment the prices is $5.5 /box of 13kg, around $2-2.5 lower than the same period of last year. The low price has a big impact on our trade volume, this season, we sold a much smaller amount of bananas.

“At the moment, South Korea is our main overseas market. The export volume from Vietnam to South Korea is increasing rapidly due to the lower import duty (15%) compared with the other banana exporter Philippines (30%). Under the Free Trade Agreement between the two countries, we expect the tax will be reduced to 0% by 2024.”  Said Mr. Nguyen.

“Besides South Korean companies, more and more Chinese and Japanese companies are also sourcing Cavendish bananas from Vietnam. For Japan, although the market size is limited, the good thing is that the export price is always quite stable. For China, besides free tax advantage, the short shipment time better guarantees the products’ freshness. We see the huge potential in this market, however, the challenge is, the price in the Chinese market is not very stable. We face strong competition from other South-East Asian banana suppliers, such as Myanmar, Laos and Cambodia.” China is open for Cambodian bananas since May this year. When talking about this possible competition, Mr. Nguyen says, “Vietnamese banana exporters are under stress, we have to compete with Cambodian banana exporters with a better price and higher quality.”

“We take good care of our products from the farming end. After picking the bananas, most of the time we pack and load the products right away. In this case, we can guarantee 5 weeks of product freshness after loading into the container. Besides satisfying customers with good quality, product packaging is also very important. Depending on clients’ requests, we often supply products in PE foam pads, plastic vacuum bags and carton boxes with 13kg net weights.” Mr. Nguyen says.

Nguyen Huu Thien
Hand & Hand Co., Limited
Mobile: +84 903 81 66 82, +84 988 374 925

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