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Philippines: Banana exporters push for cap on exit prices

The Filipino banana export industry wants its government to set a cap on the exit price of the commodity, intent on smoothing out seasonal swings in demand and fluctuations in the harvest.

Alberto F. Bacani, chair of the Pilipino Banana Growers and Exporters Association, Inc. (PBGEA), said setting an exit price cap, or the price imposed on the crop before it is shipped to its destination, is practiced in Ecuador, one of the world’s biggest exporters.

“What I would ask the government to do is to follow the model of Ecuador… the (Ecuador) government heavily intervenes in terms of pricing,” Bacani said in a news conference Friday.

“We should not (become) an expensive banana,” he said, adding that the open pricing system makes it difficult for the industry to develop sustainability plans given altering demand as well as the continued threat from Panama disease and emerging competitor countries. PBGEA President Victor S. Mercado said independent growers, such as some agrarian reform beneficiaries, that do not have contracts with buyers face the biggest risks.

“What is scary is we have become dependent on the China market,” said Bacani. Mr. Mercado said some Chinese buyers have already indicated a likely drop in orders due to the 2019-nCoV outbreak. s of November, the value of exported Cavendish banana rose to $1.8 billion from $1.38 billion in all of 2018, according to the Philippine Statistics Authority.

Mercado, however, said while the value was higher, PBGEA data shows production actually fell to 195 million metric tons (MT) last year from 207 million MT in 2018 due mainly to a mild drought, which is expected to continue this year.


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