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Chinese officials destroy Philippine banana shipment

As tensions continue over the South China Sea ruling, yet another Philippine banana shipment has been intercepted on pest risk grounds.

Qingdao News reported Shandong officials destroyed 21 metric tons (MT) of the fruit, which had a value of US$ 21,683.

bananas dumped - Qingdao news

Photo: Qingdao News

The story reported the fruit was put into landfill because the gray pineapple mealybug Dysmicoccus neobrevipes was found in the consignment of 1,556 boxes.

It is the same pest reported in interceptions of Philippine bananas that took place in March.

While the official reason behind the destruction of fruit is pest threats, these types of SPS (Sanitary and Phytosanitary) announcements often coincide with international disputes.

Amid a territorial conflict over the Scarborough Shoal in 2012, China placed restrictions on Philippine bananas alleging mealybug detections.

Last year the Philippines shipped 686,904 metric tons (MT) of bananas to China, accounting for 64% of total imports. However, this represents an 11% reduction year-on-year while the second-largest supplier Ecuador raised its shipments by 22% to reach 283,006MT.

Other suppliers include Myanmar (55,683MT), Thailand (26,115MT) and Vietnam (10,133MT).

Eduardo Ledesma of the Ecuadorian Banana Exporters Association (AEBE) told www.freshfruitportal.com the problem between China and the Philippines could generate more demand for Ecuadorian fruit.

“Hopefully that happens as it would help strengthen Ecuadorian bananas, and in the end it would generate more investments and jobs in Ecuador,” he said.

“This year we’ve fallen by more than half in China, mainly because prices from the Philippines are cheaper and the distance for them is much shorte. We also have some domestic problems – we have to be more agile. We must have procedures and processes that are less cumbersome.

China-Philippines conflict flows over to social media

Philippine mango growers have also suffered from the conflict, with some Chinese fruit traders refusing to stock the country’s dried mango products amid calls for a boycott.

Also on social media, Chinese netizens have slammed a Japanese YouTuber for a video (which you can see below) eating 137 Philippine bananas, in what some saw as a reference to China’s population of 1.37 billion people, Mingpao reported.

“During this sensitive period, you eat 137 bananas from the Philippines to insult China – do you have brains? Do you think us Chinese people can be easily bullied?” one comment said.

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U.S. distributor goes to court over banana no-show

Long Island-based fruit company Esposito Brothers has launched a lawsuit over an alleged failure to deliver a large shipment of bananas in mid-2013, the New York Post reported.

The publication reported 21,000 boxes of Ecuadorian-sourced Bonita bananas Esposito ordered from Fruit Importers Americas Inc. did not arrive in July that year.

The story reported the lawsuit was against “Ecuador’s biggest fruit conglomerate”, but Esposito declined to comment on the case or provide clarification as to the details.

The suit seeks at least US$ 27 million in damages, the story reported.

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“Banana prices are up”

Eduardo Ledesma, President of the Association of Banana Exporters of Ecuador
“Banana prices are up”

A 19.5 kilo box of Ecuadorian bananas for export will cost 6.55 dollars in 2015. This increase, higher than 9%, was announced a few days ago by Ecuador’s Ministry of Agriculture.

“Banana prices are up and it is insane, as we still don’t have the same tariff advantages in Europe as Colombia and Central America. This situation only serves to undermine our competitiveness,” affirms Eduardo Ledesma, president of the Association of Banana Exporters of Ecuador (AEBE).

Growing prices could partly be a response to rising production costs, but it is mainly due to the high demand for Ecuadorian fruit registered this year, which would lead, according to estimates by the AEBE, to break the record achieved in 2011, when 283 million boxes were shipped.

“Costs have increased, but not enough to justify a rise of that magnitude, and the circumstances that were taken into account to warrant this price increase are completely different to the current world problems,” explains Ledesma.

One factor that greatly influenced the increase in demand for Ecuadorian bananas was Colombia’s poor supply, reduced as a result of storms and heavy rains that affected 15,000 hectares of banana plantations in the region of Uraba, where more than 4,000 hectares were totally destroyed, and causing prices in Ecuador to increase between 1.5 and 2 dollars in a few days.

Moreover, the increased tension due to the territorial conflict in the South China Sea between China and the Philippines, the largest supplier of bananas to the Chinese market, brought complications and obstacles to trade between the countries of the region. This situation was also favourable for Ecuador, as it dramatically increased its shipments to China, reaching 300,000 boxes of bananas per week.

“In 2015, Colombia will recover its usual production volumes and, meanwhile, the Philippines is managing to improve its political relations with China; this, combined with lower demand in the Middle East because of conflicts and the Russian crisis, should result in a totally different situation to that of a few months ago,” affirms Ledesma.

Russia, Ecuador’s main client, accounting for 25% of the country’s banana exports, reduced its purchases by 300,000 boxes per week, forced by the depreciation of the Rouble and the economic crisis.

Furthermore, the Russian veto has resulted in a greater supply of various fruits in the European market, in many cases with falling prices, affecting the market share of bananas.

Given this complex situation, large companies already warned that they would reduce their purchases, which brought much concern to Ecuadorian banana producers.

According to Ledesma, the consequences will not be felt as much during the first months of the year, but as soon as Guatemala and other countries in the region start shipping, the large volume of fruit in the market will drive prices down, and the high internal costs generated by this increase will have a negative impact on the sector.

“We, at AEBE, will try to convince producers and the authorities to revise the price adjustment and bring it to a more realistic level, which is not an easy task, but we must try for the good of the industry and the country,” concludes Ledesma.

More information:
Eduardo Ledesma
AEBE
[email protected]

Publication date: 12/8/2014


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