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Purchase price of Chinese bananas is coming down

The Chinese banana market is dominated by bananas from Yunnan between November and April in the subsequent year. The supply from Guangxi, Guangdong, and Hainan is fragmentary. The average purchase price was around 3.32 yuan [0.51 USD] per kg prior to 26 February, however after Chinese Spring Festival [12 February] the trade began to slow down. The supply volume was smaller than around the same time in the previous year, which strengthened the price and gave farmers the hope to hold out for higher prices, but consumer demand gradually began to weaken and the order volumes began to decline. The price fell from 3.32 yuan to the current price of 2.23 yuan [0.34 USD] per kg.

The peak period of the banana season is over and the price is coming down. There are several reasons for this development: the price was too high prior to Chinese Spring Festival, which leaves a lot of room for decline. When the temperatures went up, the bananas grew quicker and the supply volume expanded. The holiday period when bananas sell well was shorter than usual because of weather conditions and the pandemic. This put a lot of pressure on the banana market. Wholesale traders considered the price too high and trade proceeded with difficulty. There was not a lot of room to adjust the price downward without losing profit. Visiting traders were hesitant to order bananas to complement their own stock.

The weather was cold last year. There were frequent cold waves that affected many banana plantations. The product quality of bananas suffered as a result. This situation created inequalities in the market. Consumers were unwilling to spend much for expensive high-quality bananas, but were disappointed with the poor product quality of cheap bananas. In addition, the general consumption level declined during the pandemic. Fruit trade is slower than usual and the banana trade in particular is very slow. The supply volume exceeds market demand, so that only a low price can stimulate the sales volume.

The banana market is weak and there is little room for profit in the near future because the supply volume exceeds demand. If the balance can be restored, then perhaps later in the season the price will stabilize again.

Source: finance.sina.com.cn 


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