Banana exports surge thanks to high demand from China

According to the General Department of Customs, in October 2022, Vietnam's banana exports reached nearly $14 million, up 47.9% compared to October 2021. Normally, this is already a very impressive growth. In the context of exporting many other fruit products such as dragon fruit, mango, and banana... decline in October compared to the same period, the strong growth of banana exports at the end of the year is even more important for fruit and vegetable exports in general.

Thanks to strong growth in October, banana exports in the 10 months of 2022 are maintaining double-digit growth when reaching over $257 million, up 27.3% over the same period in 2021.

The strong growth of Vietnam's banana exports is primarily due to the high demand in the Chinese market.

According to China Customs, China's banana imports in September 2022 reached $74.3 million, up 12.5% compared to September 2021. In the first nine months of 2022, China's banana import value reached $948.56 million, up 18.4% over the same period in 2021.

China still imports the most bananas from the Philippines market, with the import value in the first nine months of 2022 reaching $375.5 million, up 5.9% over the same period in 2021.

Vietnam is the second largest banana supplier to China, but the growth rate of banana imports from Vietnam is much higher than from the Philippines. Specifically, in the first nine months of 2022, China imported $213.3 million of fresh bananas from Vietnam, up 49.2% over the same period in 2021.

Policies on agricultural leases and rising labor costs have reduced China's banana acreage. The Panama disease also caused the quality of Chinese bananas to plummet, thereby boosting the demand for banana imports from Vietnam as well as from other banana-exporting countries in the region.

Recently, the General Administration of Customs of China announced that fresh bananas from Indonesia that meet the phytosanitary requirements according to regulations will be allowed to be imported into China. According to the notice, Indonesian bananas exported to China must be in a green, unripe state and come from an authorized growing area in Indonesia.

Indonesia is one of the major banana producers in the world, with 70% of the production concentrated on the island of Java. Every year, most of the bananas produced by this country are consumed in the domestic market, with only a relatively small portion destined for foreign markets in East Asia and the Middle East. Overall, Indonesia's banana trade has slowed down in recent years due to the influence of El Nino. In 2021, Indonesia's banana exports will reach $6.09 million, only about 40% of the 2018 banana export value.

Besides the Chinese market, Vietnamese bananas are also being promoted to many other markets. According to Japan Customs, in the first 8 months of 2022, banana imports into the country reached 728.7 thousand tons, worth 80.2 billion Yen (equivalent to $539.3 million).

In the first eight months of 2022, Japan imported 5.7 thousand tons of bananas from Vietnam, worth 687.9 million Yen (equivalent to $4.6 million), up 20.1% in volume and 37.7% in value over the same period in 2021. The proportion of imports from Vietnam accounted for 0.8% of the total amount of bananas imported into Japan, up 0.2 percentage points over the same period in 2021.

Although Vietnamese bananas still account for a small proportion of the total value of banana imports to Japan, Japanese traders are tending to increase banana imports from Vietnam. Therefore, there are still many opportunities to expand Vietnam's banana market share in Japan. The demand for bananas in Japan is continuing to increase and this is the most consumed fruit in this market. According to Reuters, Japanese households spend an average of 4,387 Yen (equivalent to $29.9) on bananas a year.

In addition to conventionally produced bananas, Japanese traders are also looking to buy certified organic bananas.

Mr. Vo Quan Huy, Director of Huy Long An - My Binh Co., Ltd (Long An province) - a business that has been exporting bananas to Japan for many years, said that there were Japanese customers who wanted to order organic bananas from Vietnam in large quantities. However, his company did not dare to accept orders of organic bananas from Japanese customers because banana production is currently facing a number of diseases that are difficult to control with organic and biological methods. When it is not possible to treat diseases with organic and biological solutions, it is not possible to guarantee a true organic banana product. This is true even in other stages, they have followed the organic farming process.