China is a major banana-growing and consuming country. Every winter, as the temperature drops, domestic bananas turn black and dark in color due to the cold, and imported bananas enter a favorable sales period. This year, however, things are different.
"In previous winters, when the temperature in Guangxi, China's main banana-producing area, dropped below 13 degrees Celsius, it was the peak season for imported bananas. But this year's situation is special. Currently, there is a serious supply jam of imported bananas on the market. The market is down, and sales are not smooth." Tom Yan from New Moon Agriculture Development Corp said that the company is exporting bananas from the Philippines to China.
"Currently, the price of imported bananas from the Philippines has reached a historical low in the Chinese market, with prices and export volumes falling by about 40% year-on-year. In addition to the impact of the economic environment, domestic weather changes this winter and the large number of Vietnamese bananas on the market are the main reasons for the low price. The decrease in export volume is due to the production reduction caused by local Panama disease and weak market consumption."
According to Tom, the price of imported bananas began to decline a month ago. "At that time, many traders were storing bananas in large quantities to prepare for winter sales. However, the temperature suddenly increased instead of falling as expected. The competitive advantage of imported bananas was not obvious and they had to be sold at a reduced price, so the market began to decline."
"Recently, due to the cold wave, the temperature has dropped sharply, and the market's willingness to consume fruits has been low. On the other hand, due to the surge in imported banana prices in the first half of this year, many farmers in Vietnam immediately increased their investment in expanding or switching to banana plantings, resulting in a significant increase in production. Vietnamese bananas are seasonal, so they are sold intensively. At present, the volume of Vietnamese bananas in the Chinese market has exceeded that of Philippine bananas. The excessive volume on the market has lowered the overall market."
The Philippines, Vietnam, and Cambodia are the main source countries of bananas to China in Southeast Asia. Tom analyzed the characteristics of different origins:
"The advantage of Philippine bananas is that they are continuously supplied throughout the year. The price differences between different specifications and grades are obvious, which facilitates marketing. The shortcomings are that local land policies limited management level of land from keeping up, the large number of individual farmers makes the quality of bananas vary, and the production areas are too sensitive to market fluctuations, leading to excessive price increases."
"Cambodian bananas are the biggest competitors for the Philippine bananas, and the market performance is good. The local topography and soil are conducive to banana cultivation, flexible policies, and high levels of factory management and quality control, making bananas of good quality. The current challenge is that the labor force is insufficient and banana planting technology started late, which increases the cost of planting. In addition, due to insufficient awareness of diseases such as Panama disease, signs of diseases have begun to appear."
New Moon Agriculture sells bananas under the brand name "D&J" and focuses on the Chinese market. "Different regions in China have different preferences for bananas. For example, the north prefers large bunches of bananas, Shanghai and surrounding areas prefer small B-grade single bananas, and Shenzhen prefers extra large bananas."
"In the future, we hope to expand into the Middle East and Russian markets. These markets like bunches of bananas, and we can supply bananas of these sizes according to demand."