“The season when most bananas are sold runs from September until November. This year the market is not as strong as it was last year. The average wholesale price we receive for our crop hovers around 3 Yuan per kg, which is a 20% decrease compared to the same period last year. This drop is still small compared to the average market price, which is now 50% lower than last season. We can receive a higher price for our crop as we are strict on quality controls and can sell a premium product. Therefore our trade is less price sensitive,” explains ZhongYi Zhang of Beijing Yongxin Hengchang Fruit
The 50% price drop is caused by oversupply on the Chinese market. Banana plants are vulnerable to weather conditions. Last year big banana plantations in the South of China have been damaged by storms. This leads to high prices on the market, which attracted new growers. Now local supply is easily meeting demand. In addition, import of bananas has increased by 25%, which is pushing prices down further. ZhongYi Zhang is positive about the future, but he reckons that it might take until next season before prices start to move upwards.
Beijing Yongxin Hengchang Fruit is a fruit trade company with annual trade revenue of more than 20 million Yuan. Bananas are its main product. The company sources bananas from Guangxi, Hainan and Yunnan province. Yongxin Hengchang Fruit has four subsidiaries in Beijing and the city is its main market. ZhongYi Zhang continues: “in addition, we have invested in a cold storage of 2,000 square meters. We now cooperate with transports and distribution centres throughout China to get our products to our clients fast”.
Mr, WanCheng Ning is the export manager of Jinghong Chuangfu Banana, a fruit trading company in Yunnan Province, that mainly trades in bananas. “Thanks to a favorable climate and flat scenery, Yunnan is a prime location for growing bananas. We are a relatively small trader. Each year, at the start of the banana season in June, we buy bananas from local farmers. We then sell the bananas to supermarkets.”
Mr. Ning is also not positive about the current season: “due to good weather and an increase in banana plantations and production capacity, overall production is much higher than last year. As a result, the market suffers from oversupply. The season started with low prices, and since then prices have been slowly decreasing.”
“Last year we bought bananas from local farmers in Yunnan at 1.9 Yuan per kg. This year prices dropped to 0.9 Yuan per kg. Also, different to earlier seasons, this summer we were contacted by a number of local farmers asking us to take some bananas off their hands. This shows how worried some of the local farmers are. This is their best period to sell. If they cannot sell their crop now, they face the risk of having to throw out the product. I was shocked when I received an offer from a farmer to buy bananas from him at 0.5 Yuan per kg. However, even at that price I could not take up on the offer, as we first need to sell our own stock on time. I think that 80% of banana growers in Yunnan are suffering losses this season.”
