Home » Customs & Trade, Maritime » Freight rates for PH banana exports to the Middle East up 25% due to capacity crunch

Apart from strict quarantine requirements in China, Philippine banana growers and exporters are facing yet another problem — limited vessel capacity and higher freight rates to the Middle East.

“Right now, we are facing vessel capacity issues for our banana exports to the Middle East due to limited space for our products,” Hans Tuchel, president of Banana Brothers, a medium-sized banana exporter based in Davao, told PortCalls.

“The limited capacity has also increased freight rates by at least 25% as operators prefer shippers with the highest bid for their space,” Tuchel, who is a Philippine Exporters Confederation member in Region XI, explained.

“With banana exports to the Middle East spiking by some 1,000% at the start of every year, unless the carriers deploy bigger vessels or the China market opens up again, it will be a big problem for us,” Tuchel said.

Many carriers are deploying vessels on the more lucrative intra-Asia trade, he pointed out.

Based on Tuchel’s estimates, 10-15% of banana exports to the Middle East are not accommodated due to limited vessel capacity.

Since China tightened quarantine restrictions on banana exports early in the year, Philippine banana exporters have shifted their focus to the Middle East. Philippine bananas became popular in that region once again due to their reduced prices following the China debacle.

China, the country’s second-biggest market for bananas, used to source most of its requirements from the Philippines. Japan is the Philippines’ top market and the US the third.

Other markets for bananas being looked at by the government are Russia, Canada, Iran, Iraq, Australia, Scandinavian countries and other ASEAN nations.

Image courtesy of Green Banana” by anankkml / FreeDigitalPhotos.net

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