Tue, Aug 09, 2011 - Page 3 News List

Banana deal political: academics

‘FISHY’:With Taiwanese bananas selling cheaper in China than at home, academics asked officials to explain who was covering the difference

By Chung Li-hua  /  Staff Reporter

A farmer yesterday displays bananas to journalists after delivering them to a temple in Sinpi Township, Pingtung County, for sale. He said he had the most miserable Father’s Day because he might have to destroy the whole truckload of bananas because of the fruit’s low retail price.

Photo: Yeh Yung-chien, Taipei Times

The Council of Agriculture has touted plans to sell 2,000 tonnes of bananas to help farmers deal with a fruit glut, but with Taiwanese bananas selling below costs in China, academics are questioning whether politics is involved in the deal.

A report by China’s China News Agency said that the first 100 tonnes of Taiwanese bananas went on sale on Monday last week in Shanghai for 1.88 yuan (US$0.29) per 500g, or about NT$16.88 per kilogram.

However, the wholesale price for bananas at the end of last month was NT$20.50 per kilo at traditional markets in Taipei, averaging NT$17.70 for the whole month, and was NT$17.20 last week.

Taiwanese Farmers’ Rights Association chairman Wu Chiu-ku (吳秋榖) said retail prices were usually between NT$2 and NT$5 higher than the wholesale price, meaning that people in Taiwan purchased bananas at between NT$19 and NT$22 per kilo.

Once overhead such as transportation and customs taxes are factored in, the price of Taiwanese bananas in China should be higher, Wu said.

“How can Taiwanese bananas sell [for] cheaper on the Chinese market than in Taiwan?” Wu asked, adding that there was “something fishy” about the matter.

Wu Ming-ming (吳明敏), a professor in Kainan University’s marketing department, said the CIF — cost, insurance and freight — for a 12kg crate of Taiwanese bananas in China was US$9.50, or about NT$23 per kilo.

CIF means the seller is responsible for paying for costs associated with the delivery of the goods to the port of destination, as well as the purchase of insurance in the name of the buyer to cover potential risk of loss or damage to the goods during transport.

Adding a 5 percent tax, a 17 percent value-added tax (VAT) and 20 percent in management and marketing fees, every kilo should sell in China for NT$33.50 to meet overhead costs, Wu Ming-ming said.

It is unreasonable for bananas to be selling in Shanghai for less than half the overhead costs, Wu Ming-ming said.

Lee Yuan-ho (李元和), head of Fo Guang University’s economics department, said “zero distance” pricing and overhead showed that this was not normal trading practice, adding that as businesspeople would never invest to lose money, the government should explain who was covering the difference.

Market sources say that bananas shipped to China are being bought for between NT$10 and NT$12 per kilo, about the same price as those sold domestically.

The sources said that after packaging, transportation and handling fees were added, the CIF cost in China should be no less than NT$23 per kilo.

Hsiao Tung-chung (蕭柊瓊), deputy director-general of the Council of Agriculture’s International Cooperation Division, said the Taiwanese bananas sold in Shanghai last week were a commercial transaction between businesses based in Pingtung and Shanghai Fruit Co.

Translated by Jake Chung, Staff Writer

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