The banana market is a volatile one and according to Mr. Ricardo Guedes, general director of Portuguese banana trader Franol, retailers are hyper aware of any small changes going on in the market: "The market for conventional bananas in Europe appears to have reverted back to old trends in terms of imbalance in supply and demand that we used to see pre-2020. This is at least what we can observe from our side of Europe. Retailers are hyper aware of small changes in market circumstances, such as adjustments to shipping rates and FX rates, which allow them to dictate their terms to the supply chain, which is in turn forced to find ever more efficient systems for packing, shipping and ripening. In and of itself we don't believe this is necessarily a problem, it's just a natural consequence of imbalance between supply and demand. Fortunately, our team and supply chain are lean and tight knit, which allows us to adapt to such market demands."
Although there has been only one major player on the global banana stage, Franol hopes to be a reliable supplier for bananas in Europe, Guedes explains. "Everyone keeps an eye on the largest producer of conventional bananas that ships them to the European market, Ecuador. But world events over recent years have rocked the stability of Ecuadorian banana market, making its volume and price fluctuations a little irrelevant and unhinged. The European retail market we can observe is primarily focussed on contract prices, so the wild fluctuations of price at origin aren't the main factors influencing prices in Europe. More stable factors such as seasonal demand, peaks in production of banana from our own European nations, and so on impact the prices more. This can help explain the vast discrepancy and irrelevancy between the spot market levels at the origin versus the prices in Europe. Clearly, it makes more sense in recent years to anchor our view and expectations of the market by the trends of the destination, rather than the origin."
Currently Franol mostly supplies the Portuguese and Spanish market, but hopes to expand into other European markets soon, Guedes states: "Over the past five years we have made significant steps to develop and adapt to the Spanish and Portuguese market. We've enjoyed the move to our new facilities, where we've set the foundations for doubling our capacity and modernised our ripening system. This strategic step enables us to serve our existing clientele with increased efficiency and precision, while positioning us as a strong partner for other retailers in our peninsula. Our bananas are primarily sourced from Costa Rica and the island of Madeira. Roughly 30 per cent of our bananas are coming in from Madeira every year. Of course, our fruit is a matter of national pride, although we don't produce anywhere near the volume that our population consumes. Our market is not restricted to Portuguese clients. We also deliver to Spanish markets and have been negotiating with clients further out for occasional orders."
After recent growth, Franol has no intentions of stopping there and aims to double their ripening capabilities once more. "It's certainly exciting for us to look back at our recent growth and expansion, and with that same momentum, look forward and envision what's ahead. In many ways, it's like we've opened up a new chapter from which further investment and growth will be a natural by-product. But to be more specific, we've paved the way already for doubling again our ripening capacity to keep up with the pace at which we're growing," Guedes concludes.
For more information:
Ricardo Guedes
Franol - Importação e Exportação de Frutas, Lda.
Tel: +351 252 921 784
Email: geral@franol.pt
www.franol.pt