Vietnamese Bananas Are Gaining Ground in East Asia

Published 2022년 10월 31일

Based on local insight from Thao Nuyen, Tridge Origination Senior Manager in Vietnam, increasing demand from China puts upward pressure on banana prices, while farmers are holding onto sales, expecting even higher prices. Prices of fresh bananas from Vietnam in W43 to China were approximately USD 9.50/box CIF and to Korea USD 11.00/box CIF. Vietnam’s fresh banana exports to China increased by 10% YoY to 740,000 mt. China is Vietnam’s largest export destination for bananas. Japan represents one of the emerging markets, with an increase of almost 38% YoY in the value of imported bananas from Vietnam, a total of USD 4.6M in the first eight months of 2022.

According to Thao Nguyen, Tridge Origination Senior Manager in Vietnam, the price of bananas has increased continuously from mid-October until W1 of November. A substantial increase in demand from China fueled prices, while farmers in Vietnam are aware of the lower quantities in the domestic market and are holding on to the sale. Prices in W43 to China were approximately USD 9.50/box CIF and to Korea was USD 11.00/box CIF. From January to June, China imported 1.11M MT of bananas, a YoY increase of 9.93%. The value of goods was USD 562M, an increase of 26.35% YoY.

Source: Tridge

Vietnam has taken advantage of the Chinese market's proximity and lower banana production in China due to the Panama disease. Panama disease is the most severe threat facing the banana industry, with no cure and no banana varieties that are resistant to the disease. 80% of global production is threatened by Tropical Race 4 (TR4), a strain of the Panama disease. China's domestic banana production area has decreased in recent years, and overall output is low.

In the first five months of 2022, Vietnam shipped 740,000 mt of bananas to China, a 10% YoY increase compared to last year. Vietnam accounted for 43% of China's total banana imports, surpassing the Philippines, Cambodia, Ecuador, and other suppliers.

The Plant Protection Department of Vietnam Ministry of Agriculture and Rural Development- and the General Administration of Customs of China are currently negotiating technical exchanges and developing protocols for eight types of fruit officially exported to China. For bananas, although of great importance for trade, there are no signed protocols. According to the Plant Protection Department, the signing of the Protocol will help trade activities between traders of the two countries take place more professionally, helping to stabilize output.

Another market that is showing increased growth in banana export from Vietnam is Japan. Japan's imports from Vietnam in the first eight months of 2022 accumulated to 5,700 MT, up 20.1% YoY, and reached USD 4.6M in value, which is an increase of 37.7% YoY compared to the same period in 2021. Although Vietnam's market share of bananas in Japan's overall import has increased, the quantities are still low and represent only 0.8% of the market share.

Still, the Vietnam Ministry of Agriculture and Rural Development has set a goal of exporting USD 5B worth of fruit by 2025 and USD 6.5B by 2030. Bananas are among 14 critical fruits which were selected for development. The plan for bananas is to increase the area to 175,000 ha and yields to 3M MT. Given the increased demand from China, it is likely that the price will continue to rise. With Japan and Malaysia emerging markets, banana traders from Vietnam are gaining importance in East Asia.