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OVERVIEW GLOBAL BANANA MARKETIt is usually busy in the banana sector in the last months of the year, as new contracts have to be signed for the following year. Besides, TR4 and Black Sigatoka hang above the sector like a Damocles sword. Nothing can be done against TR4, while Black Sigatoka requires the use of increasingly intensive plant protection products. These two challenges will shape the sector's image in the coming years. In recent months, there have been positive reports from scientists who are taking steps to address both problems. An Australian research team managed to genetically manipulate a Cavendish to give the variety resistance to TR4. Other researchers found the gene with which Black Sigatoka develops resistance to plant protection products. For the traders demanding bananas at the moment, the market looks reasonably good. Prices have been going up in recent weeks, partly due to the lower supply after the bad weather recorded in Latin America. Nevertheless, with the exception of Poland, no serious shortages are reported anywhere.
Ecuador: Prices going up
The country is still the leader in the ranking of largest banana exporters. In addition to the well-known Cavendish, Ecuador also ships red and mini bananas, as well as plantains. An exporter says that plantains are an important ingredient in Ecuadorian cuisine, but that demand is also on the rise internationally. The United States, France, Argentina, Spain and the Netherlands are some destinations for this banana. Work is also underway to reach new markets for the other special bananas. For example, red bananas are doing well in the US, Canada and Russia and the mini banana is popular in Argentina and South Korea.
Nevertheless, the Cavendish remains the banana with the greatest demand. Production in Ecuador has been 15% lower due to the weather conditions in the country up until week 48. According to an exporter, the volume won't be back to normal until week 28 next year. In the run up to the Holidays, several markets, including Russia, are demanding larger volumes. Moreover, the demand is higher because other countries in Central America are affected by bad weather, which increased the demand for Ecuadorian products. Due to the lack of conventional bananas, an exporter saw the demand for baby bananas increase.
Prices showed an upward trend between week 40 and week 48. With this, the price recovered after 15 weeks of low prices. Prospects point to the price remaining high until the weather conditions improve and the production increases.
Brazil: Lower supply of Prata bananas
The supply of Prata bananas will fall slightly in December in the most important regions. Growers are expecting better prices in the coming weeks. In October, the supply was greater because the harvesting process was sped up by the weather. Prices then stood 33% below production costs, at an average of 0.80 BRL/kg (0.24 USD/kg). Such a situation had not been observed since November 2015.
Exports are slightly lower this year than in 2016. The supply of the Nanica variety has declined in most regions. This is the most exported banana, so prices will therefore improve on the world market. Last year, most of these bananas were exported to Uruguay.
Mexico is looking for a position on the world market
Although the harvest volume usually drops slightly towards the end of the year due to the shorter days and cooler nights, a trader says that the yields are still good. He does, however, see a decrease in volume. This exporter expects prices to rise rapidly for a short time, given the demand in the US and other markets. According to the Mexican exporter, domestic bananas can deal with the competition from Guatemala and Honduras.
Philippines: Hope for recovery in 2018
The volume is stable and the sector hopes that this year will be better than the previous one. Prices are under pressure again, but there are good hopes for the start of 2018. In January or February, prices should increase. Not a lot is expected to change until Christmas, although there are hopes for better prices. In the field of logistics, exporters are hoping for more options to become available. Currently, there are some Chinese shippers exporting the bananas, although they are considered to be "quite aggressive." The hope is that more competition will lead to lower tariffs.
The government has made efforts to reduce tariffs for South Korea, Japan and the Middle East for next year. The hope is that this trend will continue. The domestic market is not very attractive, as consumers are not familiar with what they can do with the different varieties.
South Africa: Concerns about import
Opinions about the market are divided. In the Tshwane region, the volume is "on the low side," while in Johannesburg the volumes are "reasonable," and in Durban there is more volume than expected. Most of the bananas available are grown domestically. There are also limited imports from neighbouring countries like Mozambique and Zimbabwe. Traders are pleased with the quality and size of South African bananas; only one trader expresses dissatisfaction with the import.
In the north of Mozambique, the dreaded TR4 has been detected, and there are fears about the fungus spreading further. The bananas for the South African market are grown in the south of Mozambique. In KwaZulu-Natal, growers face a different disease: the bunchy top virus.
A large supermarket chain in South Africa has been importing bananas from Ecuador for some time, to the displeasure of domestic growers. The imported bananas are not significantly cheaper than the local bananas, but the supply does put pressure on the market.
Spain: Opportunities for Canary bananas
Growers in the Canary Islands have a year-round production. This year, more fruit has been harvested than in previous years due to the good weather conditions. This resulted in faster growth and larger volumes for the "plátanos". Prices are low because there is a great volume, but little demand. Demand also tends to fall ahead of the Christmas season.
Canary bananas compete with imports from Latin America, and African bananas have also been promoted for some years now. Spain has been the largest market for Canary bananas for 25 years, followed by Portugal. Because of the price difference with imported bananas, Canary bananas have lost about 25% of their market share, although they still account for 75% of the market. In any case, the sector is optimistic and expects the market to grow. There are also attempts underway to try selling Canary bananas in other parts of Europe. Germany, Switzerland, the United Kingdom and Morocco are mentioned as potential destinations. The biggest challenge is to outline the differences between the "plátanos" and the imported bananas and to be competitive in terms of prices.
France looks back on a difficult year for bananas
A French importer reports that after the poor fourth quarter of 2016, expectations were high for the start of 2017; however, the market didn't recover and prices for non-European bananas didn't go up until week 14. "We had a good market until mid-May," states the trader. However, the market was flooded with seasonal products in April and May, causing prices to plummet. The hot month of June was disastrous for the banana market. According to the trader, "people have lost a lot of money with the import and distribution since June 2017." He compares the banana market with poker. "The market cannot be predicted." This trader imports from Nicaragua, Ecuador, Colombia, Costa Rica, Mexico, Africa and Asia.
Belgium: More and more bananas via the Netherlands
Bananas are the second most popular fruit in Belgium in terms of volume. Moreover, prospects point to the banana market in Belgium remaining very stable in the long term. What is striking is that more and more bananas are reaching Belgium via the Netherlands. Over a period of four years, the total volume has increased by an impressive 700 percent. Germany has also recorded an increase in the supply of bananas for the Belgian market, with an almost 300 percent growth between 2012 and 2016. The United Kingdom was the exception to this trend, as its banana trade volume in those same four years dropped by about 70 percent.
German banana market stable
In Germany, the banana market has remained stable for several weeks. The supply and demand are currently keeping pace with one another. Only in Munich are the prices slightly higher than elsewhere in Germany. Prices in the country amount to around 13.30 Euro per 10 kg for the A-brands, compared with the 14 Euro per 10 kg recorded around this time last year. For the B-brands, the difference is similar, having dropped from 10.60 Euro to 9.90 Euro per 10 kg. Overall, the quality of the bananas is satisfactory.
Traders point out that production in reputable import countries, such as Ecuador and Colombia, is on the low side. This has to do with the so-called La Nina, the counterpart of El Nino, which causes huge temperature fluctuations on the sea surface. As in many other Western European countries, December is generally a weak month for sales in Germany. This is due to the large supply of more exclusive fruits, such as starfruit and lychees. Also, the bio and fair trade supply is on the rise in Germany. Even discounters like Aldi are trying to differentiate themselves with this.
Poland: High prices, low volume
According to a Polish trader, there is currently a shortage of bananas across northern Europe due to the bad weather in the tropics. "The banana harvest in September and October was so great in Central America that growers chose to destroy some of the production," says the importer. As a result, the supply has declined in October and November. Despite the lower estimates in Costa Rica, Colombia and Ecuador, the importer states that the production volume is normal. The trader finds the quality worse due to the cold weather and he predicts a lower supply at higher prices. "The prices in the tropics are super high and many importers have reduced their volumes because of the risks."
US: More sales expected due to health trends
The sale of bananas have remained good ahead of December. Normally, the production in the tropics decreases around this time because the days are shorter and the nights get cooler, but that has had no impact on the volume yet. Bananas are still popular and sales have remained stable in recent years. A trader explains that they are following the developments in e-commerce very closely. He is looking for ways to respond to these trends and remain relevant. In view of the also ever-growing focus on healthy food, the prospect is that the market for bananas will continue to grow. The fruit is mainly supplied by Ecuador, Guatemala and Costa Rica.
Oman: Too much volume in the market
According to an importer, there is too much volume in the market, although that may change in the next three weeks. The bananas are imported from Ecuador, India and the Philippines. Two months ago, the volume rose, and according to an importer, this larger supply is due to the greater harvests in the aforementioned countries. There is a price difference of 1 dollar between Latin American and Asian bananas. The Filipino bananas are more expensive.
Australia: Falling demand in summer months
The volumes in the main producing areas are good for this time of the year. The growing conditions in most regions are excellent. Storms in the Cassowary Coast / Atherton Tablelands region caused some wind and hail damage to a handful of growers. Most growers are preparing for the annual wet season. Extra rain will be welcome by those growers who have seen the water reserves shrink in recent months. Prices are low, continuing the trend of the past two years.
As in other countries, demand falls in the summer months. This is mainly due to the school holidays and the wide range of summer fruits. However, bananas remain popular. According to figures from Nielsen, 94% of the population buys bananas and an average of 16 kg per capita is consumed per year. In the 2016-2017 financial year, banana growers sold 414,000 tonnes of bananas worth 600 million dollars.
There are no new reports of TR4 since the last outbreak in Queensland in July. The last outbreak was recorded two years ago, in 2015, in the same region. The plantation where TR4 was detected in July was known as a company that had taken many precautionary measures and was considered a textbook example for other growers.
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