Greece: Lack of supply leads to higher banana prices

South American bananas have been quite expensive. Prices continue to rise to levels that border on the limits for what the European market can sustain. “This makes the current European market quite challenging,” says Konstantinos Koutantzis of the Greek trading company Planet Fruits.

“A lot of this has to do with low production and high demand. Producers have increased their prices while demand is still high. As long as the supply of bananas remains scarce, they’re going to try to capitalize on the current market situation,” explains Koutantzis. The trader thinks that this situation will last until Easter.

Planet Fruits is a Greek trading company that imports and re-exports bananas. The bananas are sourced from South American regions like Colombia, Costa Rica, Mexico and Honduras where Ecuador is the most important source of bananas. By importing from these countries, they are able to supply to its customers the whole year round. “We import and re-export plus-extra size bananas. We also have both organic and conventional bananas, so we can meet all of our customers' needs.”

The company sends 95% of its import volume to the domestic market. 60% of this domestic share ends up directly at supermarkets, while the rest is sold through smaller stores and wholesalers. About 5% of all imported volume is being re-exported to markets outside of Greece.

Retailers want to offer more diverse types of bananas, such as organic bananas or different sizes. “The required level for quality in the retail sector is really high right now. The demand for organic bananas is rising, although at a slow and steady pace. The market share in Greece is only a small percentage of the total segment.”

According to Koutantzis, out of the 120 containers of bananas that enter Greece per week, only two and a half to three containers contain organic produce. He also said that bananas are a staple fruit for Greek consumers. About 8.5 kilos of bananas are consumed per capita per year, amounting to 5 million boxes per year.

Greek consumers prefer bananas from Mexico, Colombia and Ecuador, as these have a better shelf life, larger sizes and better taste. Bananas from regions like Panama and Guatemala have a higher sugar content, which affects their shelf life. Even though Panamese bananas are cheaper, Greek consumers are willing to pay more for Ecuadorian bananas.

The costs for logistics are constantly changing, as it depends on currency rates and current market trends. When compared to two years ago, freight costs have diminished by 50%. “That helps a lot with lower prices. Bananas in Greece have become more affordable in spite of the current low exchange rate for the Euro,” concludes Konstantinos Koutantzis.