Last year the Chinese banana market was chaotic. The bananas were reasonably priced, but there were no buyers. After a year of chaos, the Chinese banana market began to recover in February.
The current supply volume is stable and the price is rising. The weather has been relatively cold in the last few weeks, which is why domestic banana production slowed down. The bananas from Hainan will enter the market at least one month later than last year. They will likely arrive in late April or early May. Current market supply comes from the Philippines, Vietnam, Myanmar, Laos, and Cambodia, especially from the Philippines, Vietnam, and Cambodia.
The Chinese Spring Festival [12 February, 2021] is usually a slow period for the Chinese banana market. Many people return to their hometowns for the holidays, and fruit consumption is dominated by high-end products such as cherries and blueberries. Chinese consumers buy high-end fruit as gifts during the holidays. The price of such staple fruits as bananas usually drops.
The Covid-19 pandemic extended the holiday period around Spring Festival. Most people stayed at home, especially people in first-tier cities. The delivery volumes of many fruits declined during this period, which is why the price of bananas did not drop but increased instead. The price of bananas from the Philippines was around 8 USD per box of 13.5 kg on the eve of Spring Festival. The current price is already more than 10 USD per box.
The banana market has improved much since last year. The sales volume and price are much better now. Howe the market will develop later in the season is still unclear. This depends on the supply volumes of bananas from Vietnam and Cambodia. The Philippines can supply bananas all year round, and their supply volume is stable.
The banana is a staple fruit, it is cheap, easy to eat, and hygienic, which is why this fruit is so popular in the Chinese market, and only growing more popular during this pandemic. However, as the living standards of Chinese consumers rise, their demand for top-quality, healthy fruits also grows. The market for low-quality bananas is shrinking fast. And there is a growing demand for top-quality bananas.
The production volumes in many Southeast Asian banana plantations increased a lot in comparison with last year. Only the production volume in the Philippines slightly declined. Many banana plantations in Vietnam, Cambodia, Myanmar, and Laos are managed by Chinese traders. They primarily sell their bananas in China. If the Chinese market slows down, then they have nowhere else to go.
The Philippines and South America are more flexible. The Philippines mainly exports to China, Japan, and Korea. They aim at high-end markets in these countries. Some of the smaller banana farms did not have the resources to survive the pandemic. The product quality of their bananas dropped and importers ordered fewer of their products. Large-scale banana brands, however, continue to improve their production volumes and product qualities. They continue to enjoy popularity in the Chinese market.
The banana industry in Cambodia has rapidly developed in recent years. The banana plantations there attracted a lot of attention from Chinese investors. Late last year, Cambodia exported around 200-300 shipping containers per week to the Chinese market. This puts pressure on other banana suppliers, especially distant South America. Although the distance to South America is much greater, Chinese importers also have more flexibility. They can simply reduce their order volume. During the pandemic distribution became even more difficult than usual, and many Chinese importers reduced their order volume. Many South American banana exporters suffered financial losses as a result.