The Philippine banana industry

According to IDEA’s latest copy of Industry Trends, a regular publication of the Institute for Development and Econometric Analysis, Inc. (IDEA), as mentioned previously, the second largest chunk of industry demand is driven by exports. According to the Bureau of Agricultural Statistics (BAS), in 2011, banana exports made up approximately 11.7 percent of the total agro-based products, about 2,046 and is the third highest exported agricultural product next to coconut oil and fish. Globally, the country is the third largest exporter of bananas.

Per IDEA, the industry, however, has been exhibiting growth contractions from 2007 to 2010, with the most significant decline recorded in 2009 at negative 24.1 percent to 1.66 million metric tons. In 2011, this rebounded, increasing by 28.7 percent to 2.05 million metric tons, owing to improved industry and government mechanisms, which include the establishment of industry associations such as MinFruit and Mindanao Fruit Shippers Association as platforms for business development and the high value crop development program of the Department of Agriculture.

Among the latter’s goal is to facilitate international trade by supporting the local industry’s product development. Thus, this development project aids in fulfilling the needs of the international market. However, this demand driver may potentially weaken as markets like Australia and China impose stricter product standards and political tensions arise between sides. On the other hand, banana processing which consists almost half of the total industry demand mainly features ready-to-eat products like banana chips. Of the three well-known banana varieties, the mostly utilized variety is the Saba group which is processed to manufacture banana catsup and chips among others. 

 Per same published report, losing almost a billion pesos from its trading activities, local banana exporters have been expressing their concerns over the smitten diplomatic relationship of Philippines and China since the latter is a primary export destination for the local industry. However, government officials believed that the weakened export activities reflected the tightening phytosanitary standards of the Chinese market and not the supposed diplomatic rift. Nevertheless, it has committed itself in assisting small industry players to come out of this difficult occasion. Among those is their intensified market expansion research effort to locate potential demand drivers such as Singapore. In 2010, industry exports ranks third next to Belgium and Ecuador with top export channels in Japan, Iran and South Korea.

According to IDEA, Dr. Angelito dela Cruz, a noted plant pathologist from the University of the Philippines- Los Baños, has recently discovered an antidote for two of the most virulent biological diseases affecting the banana industry. After years of incurring financial losses when the Moko and Panama diseases struck banana plantations, a new vaccine has been finally introduced to the market to treat such. Unlike the old practice of treating the disease, which includes cutting off the tree, this process is geared towards material sustainability since it induces probiotic enzymes into the tree allowing it to survive while undergoing the treatment.

(to be continued)

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