In a significant development for the Vietnamese agricultural sector, Vietnam has emerged as the leading exporter of bananas to China, outpacing the Philippines for the first time. According to recent data released by the General Administration of Customs of China (GACC), Vietnam exported 355,000 tons of bananas to China in the first four months of the year, accounting for 48.6% of the total banana imports into China. This export volume is 2.4 times higher than that of the Philippines, traditionally a dominant player in the banana export market.
The shift in China’s import preferences towards Vietnamese bananas has been anticipated since April 2024, driven by a combination of factors. The Philippines, the second-largest banana producer globally after Ecuador, has seen a decline in production due to climate change and a subsequent drop in quality. This has led to increased costs, making Filipino bananas 33% more expensive than their Vietnamese counterparts. Additionally, Vietnamese bananas have gained favor among Chinese consumers due to their consistent quality and competitive pricing.
Despite these gains, the export value of Vietnamese bananas in the first four months of the year reached only USD 145 million, a modest 3% increase from the previous year. This discrepancy between volume and value is partly due to a sharp decline in banana prices across ten major banana-exporting countries, including Vietnam, which saw a 16% drop to USD 407.7 per ton.
The decrease in prices can be attributed to China’s diversification of its banana supply, sourcing from various markets beyond Vietnam and the Philippines, including Cambodia, Laos, and Thailand. Even Ecuador, the world’s largest banana producer, is making inroads into the Chinese market, though its exports are constrained by high logistics costs.
Vietnamese bananas have also found success in other markets such as Malaysia, Singapore, South Korea, Japan, and Qatar, with export volumes increasing annually. This expansion is part of a broader trend in Vietnam’s fruit and vegetable exports, which reached nearly USD 2.6 billion in the first five months of 2024, up over 28% from the same period in 2023. Bananas now rank as the third-largest fruit export from Vietnam, following durian and dragon fruit.
The signing of a protocol in 2022 to export bananas to China marked a turning point for Vietnam’s banana industry, significantly boosting its presence in this crucial market. However, the industry remains heavily reliant on China, posing a risk if demand from this key market were to decrease. To mitigate this, industry experts like Mr. Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, emphasize the need for strategic planning and market diversification. He advocates for expanding export markets and investing in processing facilities to increase product value and reduce reliance on any single market.
As Vietnam continues to solidify its position as a leading banana exporter, these strategic moves will be essential in sustaining growth and ensuring the long-term stability of the industry.
