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Market conditions are weak, but Cambodian bananas do well

Looking back on the Chinese market for imported bananas

The Chinese banana market has been weak since the outbreak of Covid-19. Many banana varieties are reasonably priced, but there is no market for them. While Southeast Asian bananas and South American bananas are not doing great, Cambodian bananas emerged as a new force in the Chinese banana market. The Chinese import volume of Cambodian bananas has suddenly expanded. Mr. Xia Zuxiang, board member of Shanghai Sofia International Trade Co., Ltd. recently looked back on the import banana market in 2020.

Volume of bananas from the Philippines has somewhat declined
The overall import volume of bananas from the Philippines somewhat declined this year. The import volume of Sofia International Trade declined by 10%-15%. The main reason for this development is that the large import volume puts pressure on the domestic banana market, so that the price of domestic bananas drops and this in turn drags the price of import bananas down. Some banana exporters in the Philippines even suffered financial loss this year. Another reason is the impact of the Covid-19 pandemic on small-scale banana farmers. They are unable to get their hands on agricultural resources. That is why the product quality of bananas declined. Importers in turn reduced their order volumes. Larger banana suppliers in the Philippines, however, are not affected by the outbreak of Covid-19 in the same manner. They continue to export as usual.

Cambodian banana industry suddenly developed
Cambodia has fertile soil and suitable weather for banana plantation. The banana industry in Cambodia suddenly expanded in recent years. This industry attracts many Chinese investors. Despite the pandemic, Cambodia already exported more than 218,000 tons of bananas this year. "Around 200-300 shipping containers of Cambodian bananas entered the Chinese market every week in the last 2-3 months. This huge supply volume has an impact on the import volumes from different countries. China imported 400 shipping containers of Vietnamese bananas per week in the first half of this year, but now only imports 100 shipping containers of Vietnamese bananas per week. Last year the import volume of bananas from the Philippines was around 800 shipping containers per week, but now that number has dropped to 500 shipping containers. The growing import volume of Cambodian bananas also puts pressure on the long-distance import of South American bananas. The weekly import volume dropped from 200 shipping containers to only 100 shipping containers."

Cambodia puts pressure on Southeast Asian banana industries
"The growth of the Cambodian banana trade was accompanied by a loss for Myanmar. That is because Myanmar mainly transports bananas overland and the outbreak of Covid-19 has created additional obstacles at customs. Cambodia and Vietnam mainly transport bananas via sea freight from Ho Chi Minh port. This route has been relatively unaffected," said Mr. Xia. Banana plantations in Vietnam, Myanmar, and Cambodia are mainly managed by Chinese and their bananas are mostly destined for the Chinese market. When the Chinese market is weak, these plantations do not easily shift to other destination markets. That is why the pressure has grown since the outbreak of Covid-19.

China imports fewer South American bananas
South American bananas are relatively large. Chinese consumers in northern China prefer large bananas, so the import of South American bananas in north China is livelier than the import of Southeast Asian bananas. Since the outbreak of Covid-19, importers have negotiated with suppliers to adjust the import volume to growing or declining market demand. The price also frequently fluctuates. However, South American bananas are generally more expensive, and the long distance trade further adds to the cost price. Many importers of South American bananas have suffered financial losses due to the outbreak of Covid-19 and its impact on the market. The supply volume exceeds market demand, so importers suffer as the price declines.

The Covid-19 pandemic has brought so much uncertainty into the international market. When asked about his marketing strategy, Mr. Xia replied: "We always trade in premium bananas. We let wholesale traders ripen the bananas and trade them wholesale according to the market. However, there were many changes in the market this year. In order to reduce the risk and maintain a strong price, we have decided to construct warehouses, and the accompanying processing facilities, including fully automated processing lines, in Nantong, Yangzhou, Suzhou, and Shanghai. We also set up stands in many first- and second-tier wholesale markets throughout the country. We hope to expand our business to provide a comprehensive set of services from the plantation to the market. We aim to reduce our import volume under these market conditions and pay more attention to product quality and customer service. We do our best to keep the client satisfied."

Shanghai Sofia International Trade Co., Ltd. is a company specialized in the import and retail of bananas. The company owns plantations in Vietnam and the Philippines. During the 2020 China Fruit Brand Convention, Sofia obtained recognition as an outstanding brand for import fruit.

For more information:

Mr. Xia Zuxiang - Board member

Shanghai Sofia International Trade Co., Ltd.

Tel.: +86 13601718690 

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