Supplies of bananas in North America are currently moving “like a chess game.”
So says Anthony Serafino of Exp Group, LLC based in North Bergen, NJ. He notes that following the hurricanes that hit Central America in 2020—Hurricane Eta in early November and then Hurricane Iota two weeks later—there’d been warnings from multinational banana suppliers that pricing would be going up on the fruit and supplies would be scarce.
“But we’re not seeing that right now. There’s not the scarcity of banana supply I thought there would be,” says Serafino. However, to make that happen, supplies to regional markets are shifting.
Supplies of bananas to regional markets are shifting.
Coastal supply changes
“We’re seeing some South American fruit arriving on the East Coast—for instance, fruit from Ecuador. That usually goes to the West Coast,” he says. “This tells me that the typical fruit from Guatemala, Honduras and Costa Rica went to the West Coast.”
At the same time, Central American countries are sending out the fruit that would normally be reserved for domestic use. “Hondurans can’t even fill their need for domestic consumption because all of what’s there is being exported. Instead, they’re buying fruit from Costa Rica,” says Serafino. “It’s this massive game of chess we’re seeing. There’s a little bit of a shortfall in supplies but we’re getting supplies still. But Central America and local consumption, their economies are being affected a little bit.”
Meanwhile Mexico is also supplying fruit to the Midwest, though thanks to adverse weather conditions, those supplies may tighten up as well.
The banana market will likely be strong until Memorial Day weekend.
Demand to pick up more
The potential downturn in supplies is hitting right in the time of year when the banana market is strongest—between now and Memorial Day is the high season. January 2021 also proved to be a stronger month on demand—stronger than January 2020. “Demand is slower to strengthen this year but it will get strong. We’re seeing a steady incline compared to the sudden increase we saw last February,” says Serafino. “Bananas are moving steadily but we’re waiting for supplies to tighten up and demand will strengthen even further. I’ll be curious to see if that happens this week and next week.”
Of course, all of this means that pricing is good and will likely increase. “Ecuador is more than $10 for fruit on spot pricing and that’s a lot. We’re not seeing that number yet. We’re still a few dollars lower. But typically, when Ecuador starts raising their prices, it takes a week or two for that pricing to arrive here. It’s coming very soon.”
As for future supplies out of Central America, Serafino notes it will likely take years for those countries to recover from that hurricane damage.