"Market demand has recently been stronger than market supply, so the price is warming up again"

The Chinese banana market has been depressed for months, but more recently the market supply volume has been unable to meet market demand, and so the market is slowly warming up again. Mr. Han Chun, General Manager of Foreign Trade at Shanghai Sofia International Trading Co., Ltd., recently talked about current conditions in the Chinese banana market as well as market predictions for the coming weeks.

Mr. Han Chun first talked about conditions in banana production areas. "The production seasons in Guangdong and Guangxi are already over, and Yunnan suffered from relatively cold weather, which affected some of the bananas. The frost damaged some of the bananas and reduced the product quality, which in turn limited the overall supply volume."

"As for import bananas, most of the imported bananas currently available in the Chinese market came from the Philippines, Vietnam, Cambodia, and Laos. In many major production areas the weather is relatively cold this season. The production volumes in the Philippines, Vietnam, and Cambodia all declined. Moreover, some of the smaller banana plantations suffer the consequences of the pandemic, such as management difficulties and a decline of both production volume and product quality. The overall supply volume of Southeast Asian bananas decreased this season, so the price went up. Moreover, shipping fees, packaging fees, and labor costs all went up as well. All of these developments put pressure on the banana market. In addition to problems in the production areas, there have also been delays at border ports due to blockage. Regular banana trade between Laos and China is severely disrupted. Traders used to transport their fruit overland, but they have now shifted to sea freight, which first requires transport from Laos to harbors in Vietnam or Cambodia. However, there is a shortage of refrigerated containers and shipping fees are high, which pushes the price of Laotian bananas up," explained Mr. Han Chun.

"Looking back on the domestic banana market in the last few months, we can see that the weather in autumn was very warm, but this did not seem to have any impact on the product movement of Chinese bananas. The ongoing pandemic is still the largest influence on domestic banana consumption. And even though the supply volume declined and the cost price went up, the average retail price is still below the level of previous years."

When asked about market prospects for the next few weeks, Mr. Han Chun replied, "demand increased around New Year's, but not as strong as in previous years. Weather conditions, the pandemic, and shipping fees all put pressure on the market. I expect the market supply volume to remain relatively small until April and the price to steadily go up. The price of premium import bananas will remain upward of 100 yuan [15.71 USD] (4/5/6 bunches), and Spring Festival [1 February, 2022] will cause some price fluctuations in the banana market."

There have been some banana packages from Southeast Asia that tested positive for traces of Covid-19. That kind of news is disastrous for regular banana trade. According to Mr. Han Chun, "Sofia International Trading strictly follows the national guidelines for inspection and quarantine. We carefully disinfect our banana plantations to stop the spread of Covid-19, and we again quarantine and disinfect our import bananas according to customs regulations. Our retail has not been substantially affected by the pandemic."

Shanghai Sofia International Trading has always traded in green bananas, but the market is changing. There are many uncertainties in the market. And to avoid risk, and keep sales stable, the company established their own banana plantations in the Philippines and Vietnam, covering an area of 1,000 hectares.

In addition, in September 2020, the company also set up booths in first- and second tier wholesale markets in Nantong, Yangzhou, Suzhou, and Shanghai for the direct sale of yellow bananas. "We aim to provide comprehensive services from production area to retail market. That is how we hope to maintain stable import volumes, product quality, and retail services despite changes in supply and demand. We work hard to keep downstream clients and consumers satisfied."

For more information:

Mr. Han Chun - General Manager of Foreign Trade

Shanghai Sofia International Trading Co., Ltd.

Tel.: +86 13816850567 

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