The Philippines reconsiders exports of bananas and pineapples to Iran, its biggest market in the region, as the effect of UN sanctions against the country's nuclear programme start to bite.
Iran sanctions far from appealing for Philippine bananas
Iran has slipped on a banana skin as western pressure over its nuclear programme mounts. Specifically, a Philippine banana skin.
Sanctions against Iran's government have resulted in a delay of payments to Philippine fruit companies, causing many to consider abandoning trade with their biggest Middle Eastern export market as revenues plunge.
Banana and pineapple producers have reported being offered oil in lieu of payments in the rapidly plunging Iranian rial, said Stephen Antig, the president of the Pilipino Banana Growers' and Exporters' Association. "Some of the local banana producers are now rethinking if they should continue trades with Iran," he told Reuters.
Iran imports about half of all Philippine bananas sold to the Middle East. Followed by the pineapple, the fruit is the country's biggest agricultural export to the region.
But western-led sanctions against Iran have led to payment difficulties for Filipino exporters, resulting in a sharp hit to trade values.
For some large producers revenues have fallen by as much as 70 per cent, with smaller farmers experiencing a decline of up to 80 per cent, said Gil Herico, the Philippines' agricultural attaché to the GCC.
"The issue is where to get payments," he said. "As far as the Filipino banana exporters are concerned, they're a bit worried now about the implementation of the UN sanctions.
"It's quite difficult, especially for the Filipino farmers being affected like this."
The Philippines, the second-biggest exporter of bananas in the world after Ecuador, sells about US$159 million (Dh584m) worth of bananas annually to the Middle East and about $32m of pineapples, Mr Herico said. Both fruits sell in large numbers during the Iranian new year.
Bigger producers may be able to shrug off the hit to sales for a while, but this was likely to be difficult to sustain, Mr Herico added. "We're now trying to search for other markets," he said, noting that Turkey, Lebanon, Russia and Poland may be receptive to Philippine fruit.
Banana exports from the Philippines totalled $470.9m last year, an increase of 47.5 per cent on the previous year. Pineapple sales totalled $339.4m, rising 40.2 per cent during the same period.
Banana production in the country has suffered in recent years as a result of bunchy top, a virus that destroys banana crops.