Banana market in China not dire despite news reports

"No one wants them even if they are marketed at 0.2 yuan per half a kilo.”

News that bananas from Xuwen were marketed at very low prices spread like wildfire, leaving the industry in a cold sweat. However, this market does not represent the mainstream prices of bananas from Guangdong. For a long time, bananas from this province were available in the market in large volumes between May and July each year. The concerned supply from Xuwen is small, so the product cannot be marketed on a large scale. In addition, the quality is low due to cold damage, so prices are naturally low. In fact, the quality of regular products from Guangdong has been improving year by year in recent years.

Recent prices in the Chinese banana market (including imported bananas) have generally been low, reflecting the unsatisfactory overall market. In terms of locally grown bananas, products of poor quality have fallen to around one yuan. Prices in some production areas are even lower, with Xuwen being one of them. Due to the cracked skin as a result of the cold weather, prices plummeted, and there have even cases where no one wanted to buy the products when they were marketed at 0.2 yuan. Fortunately, there are very few cases like this with bananas from Guangdong, and the main market period hasn’t yet arrived.

Reasons for the current low prices may differ for each production area, but there are some major factors:

The first is the impact of the pandemic. As a result of the pandemic, consumption power in China has declined. For a prolonged period of time, consumption power has been insufficient, the market has been sluggish, distribution has slowed down, and there are often cases where wholesale prices are lower than farm-gate prices. The profit of traders is low, so purchasing is not active, the sales performance is slow, and it is difficult for prices to rise.

The second is changed consumption habits. For an affordable fruit like banana, consumers only care about where they are tasty. Premium bananas with an appealing appearance are naturally what they choose. Therefore, Golden bananas marketed at 5 yuan per kilo are flying off the shelves, while inferior cold-damaged bananas are marketed at low prices.

Moreover, the weather led to lower quality. At the beginning of this year, a cold snap visited China around New Year's Day, and some production areas were severely affected, which led to declined fruit quality in the later period. When the affected bananas are grown, the outer appearance is not much different from that of the premium products, but the core is black and the skin is cracked after ripening. The appearance is poor and the taste is not good, leading to low acceptance in the consumer market. Coupled with the recent warm weather, these bananas are ripening fast and growers are eager to sell.

In addition, the sales season of Orah mandarins from Guangxi has extended, squeezing the market share of bananas. Guangxi is a well-known production area of Orah mandarins. Wuming District alone has a planted area of ​​1.2 million mu. The production this year is large and sales are slow. As of now, there are still more than 400,000 mu of about 1 million tons waiting to be marketed, which has a great impact on the bananas currently on the market.

The last factor is the impact of imported bananas. With an increasing number of Chinese companies planting bananas in Southeast Asia, the product has been marketed to all corners of China, accounting for nearly 30% of the total market volume. Behind the rapid increase in volume are strength and quality. For a long time, the advantage of bananas from Guangdong has been the uniqueness of the market window, the short distance to the Pearl River Delta, and the unique varietal characteristics. But these advantages are no longer in place.

This year may be a challenging one. First, unfavorable market conditions persist. Secondly, the cold damage has delayed the market period, which means there will be more producing areas competing on the market. Thirdly, the cold damage has led to a certain decline in the quality of some bananas. Lastly, the market window that used to be dominated by bananas from Guangdong is now shared with products from South East Asia.

Source: NCWXJT

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