Philexport to look into closure of Iran banana market due to shipment problems

The Philippine Exporters Confederation is set to form a group that will look into the possible closure of the Iran banana market to Davao banana exporters due to the United States economic embargo on Iran.

“We are not aware that our banana exports are no longer being sent to Iran but we will surely look into this especially with the Mindanao Exporters Congress,” Philexport XI Chairperson Domingo Ang said during Club 888’s media forum held at the Marco Polo Davao Wednesday.

The Mindanao Development Authority reported that banana is the number two dollar earner of Mindanao next only to coconut, with a 14.94 percent share in the total Mindanao export. Mindanao’s banana exports increased by 33.85 percent, from $467.3 million in 2011 to $625.5 million in 2012.

Ang said the problem will definitely be discussed during the Mindanao Exporters Congress slated in the city on August 1 to 3, 2013. The Congress will focus on topics like Improving Exports to Increase Philippine Competitiveness as well as Strengthening the Enabling Environment for Mindanao’s Export Growth.

The Philippine Banana Growers and Exporters Association (PBGEA) earlier expressed its concern about the possible P4 billion losses that will be incurred by the region’s banana industry as shipping companies stopped all shipments to Iran this year, including the shipment of exported bananas from Region XI.

PBGEA executive director Stephen Antig said Mercury Steamship Agencies, Inc., an agent of the Pacific International Lines which ships bananas to Iran, has advised them about the suspension of its operations. A letter sent to its valued clients indicated the last acceptance of cargoes bound for Iran was last June 15, 2013. The Mercury officials said that they have suspended the shipment of cargoes to Iran as of June 16 this year.

Antig said the suspension of shipments to Iran was part of the commitment of the shipping companies to foreign trade regulations in view of the economic sanctions imposed by the US against Iran which happens to account for 50 percent of the banana market in the Middle East.

“We have had difficulty in exporting bananas to Iran a long time ago but some exporters have found a way to export bananas through the long way although that is more expensive,” banana industry player and Cacao Industry Development Association of Mindanao (CIDAM) President Ireneo Dalayon said.

Another option, according to Antig, is the APL or the American Presidential Line which is willing to load bananas and ship them to Iran bound for Iran if the exporter has a license from the US Treasury.

Antig said he has already written the concerned government agencies including the Department of Agriculture and the Department of Trade and Industry and is waiting for their response.

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.