Cambodia and Vietnam take over bananas business in Chinese market

Cambodia and Vietnam take over bananas business in Chinese market

Cambodia and Vietnam have displaced the Philippines as a major source of bananas, according to a report in the archipelago’s second-biggest business newspaper.

BusinessMirror said the Philippines Banana Planter and Exporter Association (PBGEA) stated that profits in the banana export market dropped by 15 percent because the outbreak of COVID-19 increased shipping costs and delayed transport. This year almost 40 percent of China’s imported bananas have come from Cambodia and Vietnam.

The Philippines suffers more from distribution problems in comparison with countries such as Cambodia and Vietnam that are closer to the Chinese market and linked by land routes. Vietnam directly borders China while Cambodia borders Vietnam. That is why Cambodian and Vietnamese bananas are gradually pushing ones from the Philippines out of the Chinese market.

Last year almost 90 percent of China’s banana imports came from the Philippines, while only 10 percent came from Vietnam and Cambodia.

The head of the PBGEA, explained that shipping costs increased by 15 percent to 20 percent this year, while the transport period grew from an average of 25 days to between 30 to 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 and the potential spoiling of perishable goods.

The decline in volume and value of banana export in the Philippines has people there worried. Data shows that banana exports declined by 51 percent in January to nearly 170,000 tonnes of bananas, while the export value dropped by 47 percent to $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 exports declined by 20.6 percent in 2020 to $1.55 billion. Bananas are the sixth most important export product in the Philippines.

The General Administration for Customs China (GACC) last year gave the green light for five new Cambodian companies to export yellow bananas to China.

In a Facebook post, the Chinese Embassy in Cambodia said a decision was made naming Sing He Yi Agriculture and four other agricultural companies to be the Cambodian plantations and packaging plants approved to export bananas to China.

To date, there are 15 registered banana plantations in Cambodia, planting more than 8,000 hectares of bananas. There are also 21 packaging factories, which the embassy said had greatly improved the processing capacity, production, export patterns and competition of banana crops in Cambodia.

Hun Lak, director of Longmate Agriculture, which has invested in a 1,000-hectare banana plantation in Kampot province, said allowing more companies to export yellow bananas from Cambodia would attract further investment.

He said China has a market demand of 12 million tonnes of bananas a year.

“Cambodia’s exports of yellow bananas to the Chinese market are increasing. Investment in crops will increase, which is a positive sign for Cambodia’s agricultural sector,” said Lak at the time. Khmer Times