Philippines losing China Banana Market

The Pilipino Banana Growers and Exporters Association (PBGEA) said competitors from countries such as Ecuador may beat its members to China, which is a fast-growing market for fruits and other agricultural products due to its large and increasingly affluent population.

Only recently, China tightened entry rules for Philippine bananas. As of this month, reports have reached PBGEA that the Latin American country of Ecuador has had talks with the Chinese government to fill the void left by the Philippines.

Geographically, Ecuador is halfway across the globe from China and its distance alone should make its products uncompetitive.

However, PBGEA said, the Ecuadorian government provides subsidy to exporters to give them an advantage.

“We hope for the same kind of support from the government,” said PBGEA executive director Stephen Antig.

Philippine exporters are looking at other markets that can buffer the impact of the virtual ban that China is imposing, Antig said.

Chinese authorities have imposed what industry stakeholders called “unbelievably stringent” agricultural quarantine rules for Philippine products since March this year.

The tighter rules came in the wake of a standoff in the disputed Panatag (Scarborough) Shoal in April, although some government officials claim that phytosanitary issues had cropped up even before then.

While the China market is virtually closed to Philippine banana exporters, PBGEA said, international prices of Philippine bananas are softening due to a glut in supply.

The fruit currently costs about $1.50 to $2 per box compared to the previous prevailing price of $4.50 to $5 per box, PBGEA said.

PBGEA has said it may not meet its target 40-percent growth in exports this year due to the ongoing restrictions by China.

Japan, a premium market, is already saturated with Philippine bananas.

However, the Middle East and Europe are also big fruit buyers and may be possible alternatives for the Philippines.

Data from the National Statistics Office showed that the Philippines exported over 2 billion kilograms of bananas valued at $472.4 million FOB. Of the total, 403.4 kilograms, valued at $85,283,479 FOB, went to China.

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As you've read the article above, this is about the banana exporting industry losing profits due to stricter regulations imposed by the China on the shipment of bananas from the Philippines. Philippines is widely known as an agricultural country producing different kinds of crops, fruits and vegetables. Therefore we can say that agriculture is the backbone economy of our country. Truly we are rich in natural resources that's why most Filipinos rely on agriculture as a source of livelihood.

China is the biggest buyer of Philippine Cavendish Bananas. The Philippines has been exporting Cavendish in China for over a decade now, that's why banana growers were shocked about the news that the China rejected the bananas from the Philippines. They said that the Philippines failed to pass the new quality measures on the shipment of goods. If a single insect/mealy bug is found in a box, the whole container will be rejected and will be sent back to its origin or the Chinese government will dispose them.

                                         

How will it affect the economy?

• Unemployment

 ~> If this problem continues, there is a big possibility that a lot of banana workers will lose their job because  the owners of the banana production might decide to stop their business since the exportation of banana is not that profitable anymore. China's move of not accepting banana produced from the Philippines will greatly affect the small banana farmers.

• Low Profit/Income

  ~> As a major buyer of bananas, China provides us higher income by exporting products to them. They increases the market value and raises the economy of the Philippines. If this problem will not be resolve, our economy will slump and go down.

• Poverty

                      

 ~> Because of low income or profit, this may result to poverty because they have no money to afford their daily necessities.

China has the right to impose stricter quarantine controls but why are they imposing it  now? take note that the move came in at the time of the shoal dispute. The shoal issue may be viewed as political but it could have a devastating effect on trade relations between our country and China.

I can say that this problem still have solutions. First, the government may find an alternative markets where the Philippine Bananas can be exported to those countries but this will take a longer time because it is hard to cultivate trading relations. For now we should improve the packaging facilities in order to satisfy Chinese inspection protocols and follow the proper quality measures. 

Generally, the Agriculture Industry plays a vital role in the economy of the Philippines.

Source:http://business.inquirer.net/65695/philippines-losing-china-banana-market%E2%80%94exporters-group