The Chinese market may face a banana shortage in the future.

Bananas are a well-deserved commodity in the fruit industry, and the stubbornly high "bull market" in 2014 has brought far-reaching structural changes to the industry as a result of declining supply in the country's main producing areas and climate change. Although supply and demand in the domestic market has returned to stability this year, industry insiders also believe that with the growing demand for bananas in the Chinese market and the intensification of global climate change, China may face an increasingly severe "banana shortage" in the future.

"changes in domestic banana production have affected the number of imported bananas, and 2014 is a profitable year for China's banana industry," Liu Zijie, chairman of Jiannong Group, said at the recent Asian Fruit Symposium (Asia Fruit Congress) held in Hong Kong. due to the adverse weather factors such as small years and typhoons in China's main banana producing areas last year, there was a sharp shortage of domestic supply, and banana imports in the Chinese market surged to 1.13 million tons. Prices have skyrocketed since they doubled from 2012 and 2013 to their highest point in recent years.

It is reported that China's main banana producing areas are Guangdong, Guangxi, Yunnan, Hainan and Fujian provinces, with a total planting area of 402300 hectares in 2014, an increase of 41 percent over 2004. On the whole, domestic bananas are still the main supply in the Chinese market, and imported bananas account for only 5% of the demand. Statistics from Jiannong show that over the past 10 years, China's demand for bananas has increased steadily year by year, with the total demand for bananas reaching 13 million tons in 2014, double that of 10 years ago. According to this figure, with domestic production of only 9.08 million tons in 2014, despite the surge in imports, there is still a shortfall of 2.87 million tons in overall supply.

"China cut production by 20 per cent last year, which has a far-reaching impact on global supply and demand. It has not only led to a sharp rise in global prices, but also led to a far insufficient supply of imports from the Philippines. " Liu Zijie explained that banana imports in the Chinese market have not been stable in the past 10 years, but basically 80% of the bananas imported come from the Philippines. As a result, in the face of supply shortages, Ecuadorian bananas, which used to account for less than 10 per cent of imports, rose sharply in 2014, accounting for an unprecedented 1/4 of bananas imported in the Chinese market, injecting fresh vitality into the industry as a whole.

He also pointed out that the quality of imported bananas is significantly higher than that of local bananas, especially consumers from Beijing, Shanghai and Guangzhou have a strong demand for imported bananas. In addition, the high logistics cost of "south-to-north transportation" also means that domestic bananas are not necessarily more competitive in terms of price.

"bananas from the south are transported to the northeast, and the unit cost of land transportation is higher than that of sea freight, so the northeast region imports the largest amount of bananas. Bananas imported through Dalian Port account for 50%, while Shanghai accounts for 30%. The three northeastern provinces are the main areas for digesting imported bananas such as the Philippines. " He predicts that Ecuadorian bananas are favored by supermarkets and other high-end channels, and their popularity in China will gradually increase in the future, and imports will grow steadily.

There is great potential for demand growth in China.

Although there was a large supply gap in 2014, Liu Zijie said domestic banana production was expected to return to normal level in 2015, reaching 12.899 million tons, with supply and demand more balanced than last year. From January to May 2015, the number of bananas imported into the Chinese market was 480000 tons. However, it is worth mentioning that the per capita annual banana consumption in China is only 7.6 kg, while the international consumption level is about 14 kg. There is still a long way to go to meet the growing domestic banana consumption demand in China. "if [annual consumption per capita] reaches the international level, it means that an additional 13 million tons of production will be needed." Liu Zijie pointed out.

This year's severe El Ni ñ o phenomenon has also affected banana suppliers in the Philippines, South America and other places. Protracted drought and other problems have also led to supply instability and increased supply gaps in these countries. At the same time because there are not many areas suitable for growing bananas in China and domestic transport labor land rental costs and environmental costs are all rising the growth potential of domestic production is not significant.

"in some places, such as Yunnan, the entire production cost plus transportation is even more expensive than imports from the Philippines. So I am very worried about the demand for bananas in the Chinese market, and Jiannong hopes to make its own contribution in the process. The Chinese market needs to transform the whole link, but this will also increase the cost in the cold chain management process. "

He believes that in the future, potential banana suppliers such as Laos, Myanmar and Cambodia may all grow more bananas to meet the needs of the Chinese market.