MANILA, Philippines — The country’s top agriculture export is expected to suffer a 15 percent decline in value this year as banana shipments are likely to drop to $1.65 billion amid loss of hectarage and stiff competition in the global market.
In a virtual briefing Wednesday, the Pilipino Banana Growers and Exporters Association Inc. (PBGEA) said the industry sees sales volume declining by as much as 20 percent to 162.2 million boxes.
PBGEA chairman Alberto Bacani said this is more or less equivalent to $1.65 billion in export sales, down 15 percent from last year.
Bananas comprised 30 percent of the total value of agriculture exports of $6.39 billion last year. The Philippines remains the second largest banana producer next to Ecuador.
“The main reason is the reduction of hectarage because of Panama disease. This is not market driven, but purely supply driven. And some farmers have abandoned their lands due to the peace and order situation,” Bacani said.
“We are facing so many challenges and other banana countries are doing everything to take away our markets from us. They have lower production cost, they are not so vulnerable to diseases, they have reduced duties, and they get subsidies from the government,” he said.
PBGEA said the local banana industry is threatened by other exporting countries.
Japan and South Korea have not seen a decrease in their consumption. Latin American bananas, on the other hand, are eating up the market share of the Philippines.
This year, banana exports to Japan are seen falling 11 percent to 54.1 million boxes, while shipment to Korea is expected to decline by 12 percent to 19.5 million boxes.
“Their consumption has gone up, but not exclusively filled by the Philippines. We have the highest tariff at 30 percent and it’s going to discourage importers compared with Ecuador, Peru, Guatemala and Mexico which have much lower tariffs,” Bacani said.
As for China, the country’s biggest export market for bananas, shipments are seen to decline by 20 percent to 58.7 million boxes.
Aside from Latin America, the Philippines is also competing with emerging Southeast Asian countries like Vietnam, Laos and Cambodia who are starting to get a share of the Chinese market.
Vietnam saw its shipments surge to 27.7 million boxes last year, Cambodia (6.7 million boxes) and Laos (360,000 boxes).
“Definitely, they have a potential because in Cambodia, for example, they have huge lands that you can own, they have big water sources and they enjoy logistical advantage because they are right beside China,” Bacani said.
“While they are still far away in terms of technology, it would just take about five years before they can match the Philippine quality. It is a big threat moving forward and we have to watch out for that,” he said.