Until June next year, the El Niño phenomenon will definitely have an effect on the production volumes. To address this, Stephen Antig, Executive Director of the Pilipino Banana Growers and Exporters Association (PBGEA), recommends that those who can afford it should definitely install irrigation systems. Big players will have to raise the funds for that. Otherwise, their production will really be affected.
Looking at the results of this latest season, with statistics already available for the months of August and September, Antig says that exports are down by between 9 and 11% for all destinations. Their competitors are also shipping to their traditional markets (Japan, the Middle East and China), so there is oversupply and prices will likely hit rock bottom by the end of the year.
"Given this situation, I believe that anytime soon there will be another price war in the global banana market, which isn’t going to be good for any of us. Competitors like Vietnam and Indonesia already exporting bananas to our traditional markets. Our market share will definitely shrink.
As regards the domestic market, he assures that it can only absorb so much, most likely less than 5% of the actual production, which of course means there is potential for growth and more promotions are needed. “We have to do a lot of educating about Cavendish bananas, since native bananas are more expensive than the exportable ones. There is also a shortage because of El Niño, which is why we are not exporting our native bananas.”
All in all, he believes the world banana market as a whole is in a depressed state, and not only in the Philippines. However, countries like Ecuador and other producers in Latin America have lower production costs, so chances are it will not be as difficult for them as it will be for Filipino exporters. "I expect a reduction in our revenue of between 20 to 40 percent and growers will also likely switch to other crops."