This article on the global banana market originally appeared on Fresh Plaza. Click here to read the original article.
The demand for bananas in Europe and the United States (US) is generally low during the summer. However, due to the low volumes available, especially in South America, stocks are limited and trade prices have remained stable. The low production in Latin America is mainly due to the weather conditions, with the impact of El Niño particularly noteworthy. Both the demand for and production of bananas is expected to increase when the summer holidays come to an end.
Interest in organic bananas is growing. However, organic banana production is limited to a small region in Latin America. Organic bananas need a drier climate to facilitate growth as pesticides cannot be used. Ecuador, Peru and Mexico are suitable for the cultivation of organic bananas.
The first reports of TR4 in Latin America were made in late July. The fungal infection, also known as Panama disease, was detected on a banana plantation in northeastern Colombia and confirmed on 8 August. Of the 175ha infected, 168ha have already been cleared. The country has also taken measures to ensure that the disease does not spread. TR4 has previously been detected in Indonesia, Australia, the Philippines, Jordan and northern Mozambique, among others.
Heavy rains and fewer hours of sunshine have caused the country’s banana production to fall. These bad weather conditions are attributed to the impact of El Niño. Despite the lower production, Ecuador is increasing its market share in the European market.
Colombia, Costa Rica and the Caribbean
These Latin American countries normally enjoy a hot and dry climate. El Niño, however, has caused the opposite, thereby also reducing banana production in these countries. In addition, TR4 has been detected for the first time in Colombia. According to officials, this will not affect banana exports.
Panama, Nicaragua and Honduras
Exports from these countries have increased due to the introduction of less strict customs duties. What counts for these markets is the price of bananas, which have become cheaper with the relaxation of the rules.
This country recently saw a decline in banana cultivation. The fruit’s production in the Mexican state of Tabasco has been reduced due to the weather conditions. The price of Mexican bananas is therefore high, while the price for bananas from other Latin American countries remains stable. Mexico has the right climate to grow organic bananas.
Low banana production earlier this year has had a positive impact on the current market situation in the Netherlands. Although the banana market is traditionally slow during the summer holidays, stocks are limited this year and trading prices have remained fairly stable. With the summer holidays coming to an end, consumption and supply is expected to increase.
Due to the high temperatures, summer fruit is in great demand. However, this comes at the expense of the banana trade. The holiday period has also taken a toll on sales. However, the supply from ripening centres was adjusted as a precaution, so the balance between supply and demand has remained virtually the same.
Prices have also remained the same as a result, although Panamanian and Ecuadorian bananas have been sold at great discounts on the wholesale markets. In order to prevent the quality of the bananas from suffering due to the weather conditions, many batches have been transported directly from cooling facilities.
As in Germany, there are hardly any spot market sales in Switzerland. The vast majority of bananas are sold directly through contracts. There are only two or three independent ripening companies on the Swiss market, while the large supermarket chains use their own ripening centres.
This means the entire market is dominated by large suppliers. Smaller, independent ripening companies mostly rely on the hotel and catering industry. Due to the warm weather, the demand for bananas has fallen and sales are slow.
The bananas in France come from both Latin America and Africa. Bananas from Latin America mainly arrive via the port of Dunkirk, while African bananas enter the country via the southern ports before being distributed throughout the country. France grows some bananas itself in the overseas regions of Guadeloupe and Martinique. These bananas mainly end up in the major French cities.
This year, banana imports have increased considerably in China. Imports from the Philippines in particular have risen sharply; in fact, China has overtaken Japan and is now the largest importer of Filipino bananas. China also imports from Laos, Myanmar, Ecuador, Brazil, Colombia and Costa Rica. Cambodia was able to start exporting bananas to China this year.
Local production is still in the off season, but supply is expected to increase. The price of bananas has been fluctuating a lot recently. At the moment, it is rising slightly, but it is not yet certain whether this trend will continue.
The average banana price in South Africa is 10% lower compared to last year. The demand for bananas has also fallen. Since the beginning of 2019, the supply of bananas is estimated to have fallen by 14% compared to last year’s volume. Some banana growers in the country are switching to avocados or macadamia nuts as higher yields can be obtained.
TR4 has been detected in the north of the country, which means that production from this part of the country cannot be exported to South Africa. However, the bananas grown in the south of the country are still shipped to South Africa and account for approximately a quarter of the total banana supply in the country.
Both banana production and demand are expected to rise in North America. The stock of bananas has been good and stable, but with summer coming to an end, demand is expected to rise. A steady supply of bananas is coming from Latin America, especially from Ecuador, Costa Rica, Colombia and Guatemala.
The most important production region in Australia is in Northern Queensland. At the end of the season, 388 265 tons of bananas worth AUD482,2 million were produced. Given some outbreaks of TR4 last year, the quarantine rules in the Australian banana market have become stricter.
The bananas grown in Australia are mostly intended for the domestic market. However, growers are considering the development of a niche market for premium bananas intended for export. In New Zealand, the commercial banana market is also looking into the possibility of expanding. – Fresh Plaza