© Marlith (Creative Commons)
The Philippines Banana Planter and Exporter Association (PBGEA) has announced that profits in banana exports fell by 15% due to the outbreak of Covid-19, which increased shipping costs and delayed transport, reports Business Mirror.
Shipping costs increased by 15%-20% last year, and the transport period increased from an average of 25 days to an average of 30-33 days. The main reason for this delay in transport is the spillover effect from backlogs in Chinese and Singaporean ports in late 2020. Backlogs in one port mean that supply ships miss their rendezvous, which leads to further delays.
The Philippines suffers more from distribution problems in comparison with countries like Vietnam and Cambodia that are closer to the Chinese market. That is why Vietnamese and Cambodian bananas gradually push bananas from the Philippines out of the Chinese market. Last year almost 90% of the Chinese import bananas came from the Philippines, while only 10% came from Vietnam and Cambodia. This year almost 40% of the Chinese import bananas come from Vietnam and Cambodia.
Banana exports declined by 51% in January to 186,000 tons of bananas, while the export value dropped by 47% to US$85 million. Japan is still the largest export market for bananas from the Philippines in terms of export value, but China is the largest market in terms of volume. The income from banana export slumped 20.6% in 2020 to US$1.55 billion.
The Philippine government has announced a shortfall in the country’s vegetable supply for this year. Despite Assistant Secretary for Strategic Communications Noel Reyes stating that there is enough vegetable supply in the country, his agency’s latest food supply outlook offered a different picture. Based on the DA’s 2021 supply and demand outlook for vegetables, the country’s projected local production of vegetables stood at 1.69 million tons. At the same time, the country is also expected to import vegetables of about 20,000 tons, which will boost the total supply up to 1.71 million tons.
The problem is that according to the same data, the projected annual demand stood at 2.01 million tons, which is based on the projected population of 110.19 million and a per capita consumption of 18.24 kilograms per year. Reyes said Agriculture Secretary William Dar had already ordered the DA’s regional offices to work with traders to make sure the supply is distributed efficiently in Metro Manila and other areas in the National Capital Region (NCR). There is also a move to build processing facilities and trading houses, as well as expand the agency’s urban agriculture programme, which will involve the distribution of free seeds and planting materials to barangays and schools across the country.
The Philippines continues to open new markets around the world for its agri-food products, even during the Covid-19 pandemic. In just the last two months, the country has sent its first avocados to China, its first cocoa to Belgium, its first coconut milk to Russia. A 7.7-ton load of avocados was shipped by Dole Philippines from Davao to Shanghai on March 31st. The first shipment of avocados will be sold at the stores of supermarket chain Hema Xiansheng, owned by Alibaba, but there are plans to supply more stores in the future.
Speaking to sunstar.com.ph., director of the Department of Trade and Industry-Export Marketing Bureau (DTI-EMB), Senen Perlada, said: “Now is the time for Philippine agricultural products to thrive. The DTI-EMB will strengthen its coordination with the Department of Agriculture and DTI-Foreign Trade Service Corps to match supply with demand. In turn, DTI-EMB will capacitate existing and aspiring exporters for them to be able to comply with international standards.
“Covid-19 may lead to market access issues and non-tariff measures. It may be more difficult to comply with stricter regulations, certifications, external and domestic regulations. The DTI-EMB commits to assist exporters, especially micro, small and medium enterprises to comply with these requirements and introduce their products to the world.”
On 31st March, the first ever shipment of Philippine avocados (7,656 tons of Hass) was sent by Dole to China. A ceremony was held to mark the occasion on April 1st at a Dole processing and distribution centre in Shanghai, with local and Philippine dignitaries in attendance, as well as representatives of the sector. The opening of the Chinese market follows several other successful ventures for Dole in the East. In 2017, the company sent its avocados to the Middle East, Malaysia, Singapore, Indonesia and Hong Kong.
Philippine Hass avocados offer high quality at a low cost, almost all year round. The country’s relatively proximity to China also ensures greater freshness of the products. The avocados are currently being sold by Hema Fresh, the ‘new retail’ supermarket owned by Chinese e-commerce giant Alibaba.
Leading Philippine banana exporter Tadeco has warned of the dangers of lowering the guard against fusarium wilt. The recommendation comes at a time when the local government of Davao del Norte plans to demolish critical quarantine measures at Tadeco’s joint-venture with the local prison, according to BusinessMirror. In fact, according to Tadeco’s assistant vice-president for human resources, Zeaus Vadil, there are fusarium wilt-infected banana farms right across the street from the firm’s plantation inside the Bureau of Correction’s property (BuCor). Such a move risks spreading fusarium wilt and endangering the country’s vital banana industry. The local government has recently announced plans to dismantle three biosecurity facilities in Tadeco’s plantation as part of a plan to reclaim public roads. The order stems from President Duterte’s pronouncement in his 4th State of the Nation Address, in which he tasked LGUs with removing all obstructions on public roads.
Bahrain’s leading distributor of fruit and vegetables has been successfully developing banana operations from the Philippines.
Launched 12 years ago, this includes production on more than 5,000 acres of its own banana plantations, as well as distribution in Asian markets like China and Japan.
Nahder & Ibrahim also supplies all of the GCC countries, as well as Iran.
“To meet the demands of a growing market for fresh fruit, especially Cavendish bananas, we established NEH Philippines in 2001 in an innovative way.
The company has since built strong relationships with its growers, partners, and customers, “which has helped us to build a reputable name in the international fruit business,” said Abu Hassan.
This article first appeared in edition 143 (May/June 2016) of Eurofresh Distribution magazine. Read more from that issue here: www.eurofresh-distribution.com/magazine/143-2016-mayjune
Weather problems in the Philippines in 2014 created opportunities in the Asian market that Ecuador’s banana exporters hope will endure.
Ecuador has always exported to Asia. But until now, only insignificant volumes were being shipped, because even though the quality of Ecuadorian produce was better than the local supply, the shippers could easily be priced out of business. Year-end figures for 2013 showed exports of just 3 million crates. But in 2014, the Philippines had weather problems and was unable to supply its market share, leaving the window open for Ecuadorian operators to export an impressive 16 million boxes.
Asian consumers really like Ecuadorian bananas, which is why the country’s exporters forecast that these quantities will be repeated for 2015 and 2016, or even increased slightly up to 17 million boxes. Even when Philippine fruit comes back onto the market, it seems likely that Asian consumers will continue to appreciate the good prices and high quality of bananas from Ecuador. But this all remains to be seen, depending on market stability.
For Ecuador, last year 2015 was unusual, with constantly low prices. Historically, the campaign is split into two periods: high prices and low prices. Annual report graphs outlined how one season and the high-priced period minimised the losses that occurred during the low price periods. When doing the books, it was usually considered a “good” season. Nevertheless, in 2015 the price of Ecuadorian banana suffered no periods of variation, and instead remained stable. This new model gave rise to concern and uncertainty in the sector, with exports to Asia most likely to suffer.
This article appeared on page 80 in the News section of edition 141, Jan/Feb 2016, of Eurofresh Distribution magazine. Read that issue online here.