Banana exporters set plans to secure markets, find new ones

The banana industry has taken the initiative in securing its share on traditional overseas markets and exploring new ones for the country’s top fruit export, with key exporters set to hold dialogues with their respective business counterparts as well as government officials abroad in a bid to ease tariff and non-tariff restrictions on Philippine bananas.

With a new set of young officers at the helm of the Pilipino Banana Growers and Exporters Association (PBGEA), the banana industry has come up with a fresh set of programs to ensure that the Philippines remains among the world’s top banana exporters.

“The high import tariffs remain the sector’s most pressing concern. Something has to happen soon, which is why we are taking the initiative ourselves to talk to our business partners and government officials overseas to present our case for a more favorable treatment for Philippine bananas,” said Victor S. Mercado of the Marsman Agribusiness Group, the newly elected president of PBGEA.

In his market update, Alberto Bacani, the new chairman of PBGEA’s board, said Philippine bananas remain the best option for Asian and Middle Eastern markets.

"Unfortunately, we are facing so many challenges in the Philippines, while other banana-producing countries are doing everything to take away our markets from us by reducing prices through means like negotiating for reduced duties and subsidizing freight rates," said Bacani, who is the president and CEO of Unifrutti,

Bacani said the issue facing the banana industry today is no longer about companies competing against one another, but the much graver concern of the Philippines having to survive and slug it out against foreign competitors across the globe.

“We, as an industry, should cooperate to ensure that we do not price ourselves out of the market. Our government also should take notice of this fact and find means to help the local banana industry survive and thrive amidst intense world competition and political hurdles,” Bacani said.

According to Mercado, PBGEA officials led by Stephen Antig will hold talks with their business partners in South Korea, where import tariffs for Philippine bananas remain high, to ask them to convince their government to come up with a bilateral agreement with the Philippines to lower the tax from 30 to zero percent.

Antig is set to go to South Korea by end-November and will later proceed to Japan, another major market for the country’s banana sector, to talk with PBGEA’s business counterparts, and possibly Japanese officials, also on the issue of eliminating tariffs for Philippine bananas.

Other PBGEA executives led by Benny Corcolon are also scheduled to go to the Australian capital of Canberra on Nov. 27 to meet with government officials there and raise with them the possibility of allowing Philippine banana exports during the lean months so as not to compete with Australian banana growers.

We only want a level playing field in South Korea, Japan and other markets where our bananas are taxed heavily,” Antig said. “We have long been urging our government officials to be more vigorous in seeking fair treatment for our banana exports. But it seems their efforts are not enough so we are also doing our part by talking to our business counterparts and foreign officials as well before we lose our share in these markets.”

Davao City Mayor Sara Duterte-Carpio has recognized the strategic importance of the banana industry in the development and growth of the Davao region, and in sustaining the momentum of growth of the country’s exports, as bananas are among the Philippines’ top 10 exported commodities.

“The presence of industry-related associations is important as this can be an avenue for cooperation and sharing best practices to ensure that the (banana) industry develops sustainably and efficiently,” said Duterte-Carpio in a speech read for her by Councilor Conrado Baluran during PBGEA’s 25th general assembly and induction of new officers held recently at the Seda Hotel in Davao City.

Duterte-Carpio called on the new set of PBGEA officers to lead the way in encouraging banana exporting firms to strictly adhere to Good Agricultural Practices (GAP) and assured them that the Davao City government will continue to provide training programs for local banana farmers and assist them in processing documents and endorsements so that they likewise will adhere to GAP standards.

Mercado said the Davao City Mayor’s emphasis on GAP standards highlights the export competitiveness of Philippine bananas and the strict regulations put in place by legitimate and accredited banana exporters on maintaining the high quality of this top fruit export.

“For now, our focus is on sustaining the competitiveness of our bananas in the global market,” Mercado said. “We cannot remain competitive even if we strictly adhere to GAP standards because we are slapped with high tariffs while our competitors are able to bring in their exports tariff-free.”

Antig pointed out, for instance, that cheap banana imports from Central America have started to eat into the share of Philippine bananas in the Korean market simply because Central American countries were able to secure bilateral agreements on zero-tariff treatment for their bananas.

The Central American countries of Costa Rica, El Salvador, Honduras, Nicaragua and Panama will benefit from zero import tariffs on bananas to South Korea by 2021. Peru is already enjoying zero tariff on banana exports to South Korea while Colombia will get the same treatment three years from now.

Even Vietnam, a fellow ASEAN economy, will get to sell bananas to South Korea at zero tariff by 2021.

The high import tariff imposed on Philippine bananas is shouldered by the buyer in Korea, so even if the country is geographically nearer, businessmen planning to sell the fruit in the Korean market would prefer to buy from Central America because of the zero tax.