Conditions in Chinese banana production areas have been rather good in the last few weeks. In some production areas the weather is growing warmer and so the growth of bananas accelerates. Still, supply volumes from domestic banana production areas remain relatively small. According to intermediaries the imbalance between supply and demand has pushed the purchase price up, but markets struggle to deal with the high prices in production areas. Distributors and wholesale traders take a lot of financial risk.
On the one hand, some clients with stock in storage still temporarily halt their orders, but traders without stock in storage have no choice but to swallow the high price. On the other hand, supply volumes remain small and buyers struggle to secure their supply. The asking price is strong. A banana grower in Yunnan explained that this price fluctuation is irregular for the time of year. In some other production areas the price actually showed a downward trend. It remains unclear how the market will develop.
The product movement of Laotian bananas recently accelerated. Some banana growers in Laos complained that long queues at border control delayed the bananas and negatively affected their product quality. That is why the price fluctuated in accordance with the product quality. The price at the border between China and Laos is around 3.6-6.6 yuan [0.56-1.04 USD] per kg. The border between China and Myanmar is gradually opening again for banana trade, but customs procedures remain slow. Their price also changes on the basis of product quality, but ranges between 4.0-6.8 yuan [0.63-1.07 USD] per kg.
The banana production areas in Xishuangbanna are expected to reach peak production in February, and production areas in Hainan will begin to supply the market in March.
Source: ncw365.com
