In a rare turn of events, the Philippines asked Japanese retailers and consumers to bear the brunt of higher prices for its bananas to sustain the industry.

These days, we’re no stranger to food shortages (remember the potato shortage?), inflation, and the rising prices of everyday commodities. Many factors contribute to this—the ongoing conflict between Russia and Ukraine, the never-ending COVID-19 pandemic, drastic weather changes, and shortage in supply, among many others.

In this case, Philippine bananas have taken a hit, following rising production and logistics costs.

While a rare move on its end, the Philippines has asked Japanese retailers and consumers—its biggest export market for bananas—to bear the brunt of higher prices in order to sustain the industry. “The prices of Philippine bananas in Japan must be ‘fair’ and reflect increasing production and logistics costs if the public wants to continue enjoying the same level of supply and quality”, an agricultural attache at the Philippine Embassy in Tokyo explained in a recent interview with Kyodo News.

Going Bananas Over Banana Prices

The embassy’s request for a price hike was made to the Japan Retailers Association—including supermarkets among its members—around early June. This was made when the public was already feeling the squeeze of inflation on their end, with a hard blow on import prices due to a weak yen and long-stagnant wages.

This request is a rare one, as retailers have been traditionally reluctant to raise prices too much for fear of upsetting consumers who were used to stable rates. However, they have been forced to do so for a range of products.

Since 2015, banana prices in Japan have remained flat at around 260 yen or approximately PHP 105.73. But with the request for a price change, the Philippine government wanted Japan to understand that a price hike was necessary in order to offer rising costs—partly due to the COVID-19 pandemic, the ongoing war between Russia and Ukraine, especially since farmers in the Philippines are hardly getting any profits.

“You come to a situation where you just have to get a fair price of the bananas on the market which means that at current levels it will be no longer tenable to getting the supply chain going in Japan,” said Jose Laquian, the agricultural attache.

Sharing the Burden

Dominating with 76% of banana imports coming from the Philippines, the country is the biggest supplier of bananas in Japan. That’s around 844 million tons being shipped out in 2021 alone! Meanwhile, trade data from the embassy indicates that Ecuador accounted for 11%, followed by Mexico at 6.6%.

Moreover, data from the Japanese government shows that the average household consumes around 19 kilograms of bananas annually. In fact, it takes up around a quarter of all-fruit consumption. That’s how much the Japanese love bananas!

With that being said, Laquian hopes that the private sector in Japan will come to a “mutually acceptable price,” further adding that the price will be as it should, but not an absurd one at that—especially since Philippine farmers have been absorbing the rising costs this whole time.

“The system of supplying the Japanese market has been perfected in such a way that you get quality bananas in less than a week,” Laquian said, adding that the banana industry started making great inroads into Japan dating back to the 1970s.

But with rising costs and a disrupted supply chain, he called for equitable burden-sharing among stakeholders, as well as a fair return for the banana industry, which he says has 2.2 million dependents. “Sustainability means that everyone benefits. It’s a win-win situation for everybody for a small price to pay,” he said. In fact, he even added that the Philippines may have to consider selling its local bananas to other countries if the price hike request is rejected.

But what about competition from Latin American countries like Ecuador? Laquian remains unperturbed. “Let them come. It’s a competition,” Laquian said, further adding that the Philippines is at an advantage, given its close distance to Japan—thereby guaranteeing that bananas from the Philippines are fresh.

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