Photo/Illutration Jose C. Laurel V, the Philippine ambassador to Japan, at a news conference in Tokyo’s Minato Ward on June 8 (Sho Hatsumi)

The Philippine government asked Japanese retailers to raise banana prices to sustain the country's banana industry on June 8, saying that prices have stayed flat for many years despite rising production and logistics costs.

However, a senior official of a major supermarket chain said it is difficult to abide by the request for fear of upsetting customers.

Japan is the top export destination for Philippine bananas. They account for three-quarters of Japan’s imports of the popular fruit.

The Philippine Embassy said commodity prices in the Philippines are rising faster than in Japan, and production costs are increasing year by year. Recently, the increased global demand for container ships has also pushed up shipping costs, according to the embassy.

However, the retail price for bananas in Japan has remained flat over the past 20 years and a senior embassy official said banana farmers are not making a profit.

Jose C. Laurel V, the Philippine ambassador to Japan, asked the Japan Retailers Association and other organizations to sell bananas at a fair price on June 8.

The situation in Ukraine "resulted in disruption of the supply chain and affected other increase in production and other costs. It will be unrealistic and unfair for Philippine banana farmers to maintain the status quo,” Laurel said.

In Japan, prices for fuel and fertilizers are surging, accelerated by the weaker yen and the war in Ukraine.

“It is difficult to pass on rising costs to the price of agricultural products, decreasing farmers’ profits as production costs rise,” said Toru Nakaya, president of the Central Union of Agricultural Co-operatives, known as JA-Zenchu.

“I am worried some farmers may have to quit,” he said.

The agriculture ministry at the end of April asked food distribution and retailing industries to “ensure that cost increases are properly reflected in the sales prices.”

However, many retailers are hesitant to hike prices.

"Honestly, it is difficult to raise prices,” said a senior official of a major supermarket chain.

The official said bananas are one of the products that customers purchase most frequently, meaning “consumers are sensitive to the prices.”

A source close to a retail industry association said it faces the same problem with domestic vegetables.

"People will end up not buying them if we don’t lower the prices," the source said. "Raising prices is not easy.” 

(This article was written by Sho Hatsumi and Hideaki Sato.)

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