China’s Banana Dilemma

Ma Xiaomei

While other major banana producers around the world are racking up order-after-order for bananas, China, the world’s third-largest producer, remains focused on selling the fruit at home.
The biggest challenge for exporters: getting the fruit outside the country. “Transporting bananas is no easy job,” says Huang Qiutian, a banana grower and trader based in Jinping county in China’s southwestern Yunnan province. “Honestly, we are able to deal with only buyers neighboring us because of the characteristics of our products.” The fruit’s natural ripening agent, or ethylene, is the “enemy within”, say Chinese banana producers, and the reason the fruit requires careful handling and rapid transportation. Bananas grown in China tend to ripen faster than they do in the Philippines, one of the world’s largest producers of the yellow fruit. Banana plants for shipping are harvested before the fruit matures.
“We have received enquiries from Russian traders about potential export spring 2014 fru it & veg world deals, but after careful studies into the transportation (of the fruit), we decided to give up,” says Huang, owner of Jinping Zhengxing Banana Co. “We don’t have much confidence in our bananas.” China produced 10.7 million tons of bananas in 2011, or seven percent of the global total, making it the world’s third-largest producer after India and the Philippines, according to the United Nations’ Food and Agriculture Organization (FAO) But the latest export data available shows China’s sales outside the country of bananas remain low. China exported just 0.5 percent of its 2009 output, or 30,000 tons, according to a research paper by Hainan University, unchanged since 1998. That is in a stark contrast to an annualised 12 percent growth in banana output during the same period. “Chinese bananas lack competitiveness in the global market,” Hainan University says in its research paper. “China’s domestic planting techniques and related technologies lag its international counterparts.”
Part of the reason behind the country’s low level exports is that increasingly affluent Chinese are becoming major consumers of bananas. Ke Youpeng, a researcher of agriculture with Hainan University, says the total consumption of bananas on the Chinese mainland in 2012 amounted to about 10 million tons. Superior Packaging But Chinese bananas, even for domestic consumers, don’t stack up against imports. “The imported bananas, particularly those from the Philippines, are bigger in size than ours. Unlike our bananas, which go rotten quickly, their products are easy to store and transport,” says Huang. According to him, Philippine bananas also look better, adding that their “packaging and storage techniques are superior to ours.”
“It’s not a matter of the price,” says Michelle Huang, a white-collar clerk in Shanghai of imported bananas. “The criteria is value for money, and imported fruits are worth the price.” That’s part of the reason banana imports into China are high, although the FAO notes that import growth has slowed in recent years as domestic production has risen. In 2012, China imported 716,000 tons of bananas, equivalent to a tenth of the country’s total domestic production of bananas, according to the FAO. The biggest suppliers of bananas to China are Southeast Asian countries such as the Philippines, Vietnam and Thailand. These imported bananas sell at prices nearly double their Chinese counterparts. Between the mid-1980s and 2009, China’s banana imports surged more than fivefold. A ban imposed by China two years ago due to a territorial dispute in the South China Sea has hurt imports: Philippine banana imports in 2012 and 2013 dropped by 40 percent a year, according to Mainland newspaper reports. Chinese demand for Philippine bananas remains strong, however.
Challenges Before Growers Meanwhile, growing bananas in China remains beset by challenges. Unfavourable weather, which also hurts Southeast Asia, is always a problem. Hainan province, where bananas are grown, suffers frequent cyclones. Government policy also puts banana growers at a disadvantage. Governments, whether at the local or national level, focus on industrial development to shore up economic growth, rather than cultivating crops. No official figures on how much land goes into banana farming are available, but analysts say incumbent Premier Li Keqiang’s push for urbanization and consumption to drive economic growth won’t help. China’s red-hot property market has also led developers to encroach on farmland so they can build factories and residential complexes. Bananas are grown in just 4.9 million mu, or about 3,300 square kilometers, of land in China, a level that has stayed the same in nearly one decade. Guangdong, one of the country’s most developed provinces, is the biggest producer of bananas, although anecdotal evidence suggests less and less land is being used for farming as the province urbanizes. “Fresh capital is expected to flock to the real estate industry, hence shrinking the size of farmland (in China),” says Huang Feng, chairman of Shanghai-based Yinshu Capital, a fund management and economic research group.
Beyond Guangdong and Hainan, China grows bananas in Guangxi, Fujian and Yunnan. Many agricultural academics in China have been pushing the government to encourage domestic production and limit imports. Others, especially farmers themselves, say Chinese growers should keep their focus on what China does best when it comes to cultivating bananas and focus on the low end of the market. “Our purpose is simple: to sell bananas we grow at a reasonable price,” adds Huang. “We don’t care who the clients are.”