Report received from one of our partners in the Philippines…
Green banana supply has improved in the last 10 days. But because of the backlogs of factory, I don’t think any factory will attempt to lower their buying until they have caught up with their backlogs. I guess it will take a month or so to catch up with everybody’s backlog. Historically March and April are periods of short supply not because of any fundamental factor like typhoon or drought or any natural causes, but traditionally this is rice harvesting, milling and planting season. Farmers do not cut bananas during these periods; they are concentrated in rice. Based on the last 2 years data, price of banana softens a bit by end July and increases by September until late October. This is the 2nd season of rice activity in a year. Thereafter until February of next year, banana supply is normal. But between November to January prices has always been higher, if not firmed, due to China’s buying; demand from China few months before their Spring Festival is too much for supply to support.
Coconut oil right now is unusual. It continues its downtrend since mid-last year. The series of increases in the price of green banana this March and April 2018 were actually cushioned by downtrend in price of our refined oil, not equally, but at least has neutralised a percentage in the increase in banana price. Insiders think that it may all be the weakness of the foreign market and is temporary. Domestically I don’t think there is a fundamental factor that may be causing oversupply.
Freight to Europe has been fairly steady in the last year.