Philippine Banana Chips Market Update 19.11.24

Coconut oil plays a crucial role in the production of banana chips, as it is the primary medium used for frying and flavouring. Its rich, distinct taste complements the natural sweetness of bananas. However, the recent surge in coconut oil prices has been putting upward pressure on the cost of banana chips. This increase is because of several factors, including growing global demand for coconut oil in both food and non-food industries, supply chain disruptions, and fluctuating weather conditions impacting coconut yields.

Despite this challenge, the current exchange rate dynamics are providing some relief. The weakness of the Philippine Rupee (PHP) and the US Dollar (USD) is beneficial for exporters, as it makes their products more competitive in the international market. For producers in the Philippines- one of the world's leading banana and coconut oil exporters- this currency advantage helps offset rising input costs, ensuring that price increases remain relatively moderate for consumers.

Looking ahead, the fresh banana market shows promising signs. Harvest projections for the coming months are favourable. We expect stable production levels due to ideal growing conditions and effective farming practices. As a result, producers are optimistic that raw banana prices will remain steady. With this stability in the primary ingredient's cost, any further price changes in banana chips will likely hinge on the continued volatility of coconut oil prices and global economic trends.

Overall, while the current market conditions pose some challenges, the combination of favourable banana supply and current factors provides a buffer, suggesting a relatively stable pricing environment for banana chips in the near term.