Sunday, June 30, 2013

PBGEA fears P4B in losses due to closure of Iran market

The Philippine Banana Growers and Exporters Association (PBGEA) is seeking the support of the government in the wake of the possible closure of the Iran market due to the stoppage of operation of shipping companies bound for Iran effective this month.

“This could translate to losses of more or less P4 billion for our banana exporters who have not yet even recovered from the devastation caused by typhoon Pablo,” PBGEA executive director Stephen Antig said.

Antig said they have received an advisory from Mercury Steamship Agencies, Inc., an agent of the Pacific International Lines which ships bananas to Iran, about the suspension of its operations.

“We regret to inform you that Mercury Steamship Agencies, Davao will suspend the acceptance of cargoes into Iran effective June 16, 2013,” the Agency wrote in a letter sent to its valued clients. The letter further said that the last acceptance of cargoes bound for Iran was last June 15, 2013 on board Tilly Russ.

The shipping companies are suspending their operations to Iran, Antig said, as part of its commitment to comply with foreign trade regulations. It can be recalled that the United States has imposed economic and other sanctions against Iran as a result of the latter’s nuclear program. The sanctions are aimed to cut off Iran’s access to critical sources of revenue and to make its money useless outside the country.

Antig said the Iran market is one of the biggest banana markets in the Middle East, accounting for 50 percent of the Middle East market. If the shipping companies will no longer bring our bananas to Iran then what are we going to do with our products, he said.

“This is a potential man-made typhoon that will add to the burden of the Philippine banana industry,” Antig said. PBGEA, he said, has already informed the Department of Agriculture, Department of Trade and Industry and Department of Foreign Affairs about the problem and is waiting for their response.

With the suspension of operation of shipping companies bound for Iran, only APL or the American Presidential Line will be shipping good to Iran. However, APL will only load bananas bound for Iran if the exporter has a license from the US Treasury.

“This is very difficult to get and majority of our exporters here do not have this license,” he said. So now that our banana growers have rehabilitated their banana plantations after Pablo, where are they going to sell their bananas with this development?

Antig said that once again, the Philippines is suffering from an economic embargo which it is not a party to. He said the suspension will have tremendous effect on the region’s banana industry which can lead to the closure of 10,285 hectares of land planted to banana and potential job loss for up to 21,000 people.

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