New markets pose cost factors for banana exporters, but infra can bridge gaps

New markets for Philippine-grown bananas are enticing but their locations on the other side of the globe present cost factors local exporters say are difficult to overcome, except if container terminals and other facilities are built to bring down shipping and storage costs.   “As businessmen, we have to look into proximity advantage. Is it worth it for us to export to those countries?” said Mr. Alexander Valoria, President of the Philippine Banana Growers and Exporters Association (PBGEA).   Valoria also said the Philippines is the “top banana exporter to Japan and formerly to China because of our proximity advantage. It was easier and faster for us to ship our bananas there compared to Latin America. If we look at alternative markets, we must take our proximity advantage into consideration.”   The PBGEA said entry into the United States and Europe has long been eyed, but these markets is extremely challenging because of the proximity advantage of Latin American market and the numerous protocol requirements on the banana industry, as well as the Philippines’ lack of cold storage and ripening facilities.   The PBGEA does see some hope on the horizon for the Middle East market with the completion of the Davao International Container Terminal in Panabo City by the 2nd quarter of 2013.   With the container terminal, banana exporters no longer need to send their products to Singapore for their produce to be placed into container vans before shipping to the Middle East. The entire process can be done at the Davao International Container Terminal, helping reduce costs and shortens shipping time.   The possibility of exporting fresh bananas to Australia also looks dim. Mr. Valoria shares that the Australian government is determined to protect their own banana market and the Prime Minister of Australia, Julia Gillard, has even gone on  record discouraging fresh produce imports, saying it’s un-Australian to buy imported food that can be produced within their own country.   PBGEA continues to be optimistic. “Bananas are recession-proof. It’s the cheapest, most nutritious, most in demand fruit all over the world. We’re having a hard time right now but as long as we keep producing good quality bananas each and every time, we’ll eventually get back on top and establish ourselves as a leader of the industry again.” — ELR, GMA News