Vietnam’s banana exporters are navigating a challenging combination of cautious purchasing, margin compression, and expanding regional production capacity. Although demand is expected to pick up toward the end of 2026, the broader industry challenge lies in ensuring that new production capacity translates into sustained, long-term sales rather than intensified price competition for the same market share.
“The current market is highly demanding, particularly regarding price expectations and the pace of purchasing,” says Quynh Hoang of Gila Foods.
Vietnam’s banana export value reached approximately US$222.6 million in the first half of 2026, down 5.2% year-on-year, according to figures cited by Hoang. “China accounted for around 66.7% of the total value, followed by South Korea at 16.7% and Japan at 8.8%.”
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China and South Korea are currently experiencing a seasonal slowdown, she explains. “In China, increased domestic harvest volume is placing pressure on imported fruit, while a wide variety of seasonal fruits is competing for consumer spending. In South Korea, imported bananas face dual pressure: broader living-cost adjustments restricting discretionary food budgets, alongside seasonal competition from local autumn apples and pears for retail shelf space.”
Quynh draws a clear distinction between lower overall consumption and more cautious purchasing behavior. “Importers are still buying bananas, but they are managing inventories far more tightly and scrutinizing prices and volume commitments with individual suppliers. Meanwhile, demand in Japan has remained relatively stable for Gila Foods’ established programs, though market competition stays intense.”
She anticipates market conditions will improve gradually starting in November, potentially gaining momentum toward the end of the year and into Q1 2027. However, she cautions that demand recovery may not automatically lift prices. “Buyers now have more options to spread additional orders across multiple origins rather than increasing purchases from Vietnam alone.”
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Regional supply dynamics
“Vietnamese exporters are also adapting to changing regional supply dynamics. Beyond established players like the Philippines and Ecuador, large-scale banana developments in neighboring countries such as Cambodia and Laos are rapidly expanding regional output,” Quynh shares.
For her, the primary concern is how quickly total regional capacity grows compared to the additional export demand Vietnamese suppliers can effectively capture.
“Importing nations will continue to buy high volumes, but they naturally diversify their sourcing, evaluating origins based on price competitiveness, product specifications, tariffs, transit times and operational reliability.”
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Trade agreements are further reshaping this competitive landscape. According to Quynh, the Philippines – Korea Free Trade Agreement, which entered into force at the end of 2024, is progressively lowering tariffs on Philippine bananas. While Vietnam continues to enjoy preferential access, changing tariff differentials require close monitoring as suppliers compete for key retail contracts.
The result is a market where greater output does not automatically guarantee a higher market share for Vietnam. “If regional production expands faster than available market demand, exporters will face persistent pressure to offer discounts, even when overall import volumes remain healthy.”
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Building year-round demand
Cost pressures are compounding the market challenge. Hoang highlights ongoing volatility in freight and fuel costs, alongside rising expenditures for packaging, agricultural inputs, and farm operations. “Exporters are frequently asked to maintain competitive pricing even as their operational costs remain elevated. However, continuous price discounting is not a sustainable strategy for the industry,” Quynh emphasizes.
To build long-term resilience, Gila Foods advocates a strategic shift from spot-market transactions toward stable, year-round program partnerships. “This involves diversifying export destinations, adjusting product specifications such as hand sizes and packaging to specific market requirements in Japan and Korea, and tightly aligning harvest schedules with buyer demand.”
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“At the farm level, bananas must be harvested continuously regardless of short-term price fluctuations. Developing a customer network capable of taking consistent volume across all 12 months is vital for long-term stability,” she notes.
“Despite market headwinds, Vietnam has some strong advantages, including shorter transit times to East Asian markets and the flavor profile of bananas grown in the highlands. But as production expands, exporters will need to pay closer attention to costs, quality, and what buyers are willing to pay,” Quynh concludes.
For more information:
Ms. Quynh Hoang
Gila Foods
Tel: +84 396 088 512
Email: [email protected]
www.gilafoods.com