Banana growers in India's Rayalaseema region experienced a sharp price decline in November due to oversupply and weak demand. Farmgate prices for bananas fell to Rs 8–10 per kilogram (about US$0.10–0.12 per kg), while lower-grade fruit dropped to around Rs 2 per kilogram (about US$0.02 per kg). Supplies from other producing states, including Maharashtra and Uttar Pradesh, added pressure to the local market.
In response to the price collapse, Andhra Pradesh chief minister Chandrababu Naidu instructed the state marketing department to seek alternative market outlets. Officials travelled to northern India to hold discussions with traders, which resulted in agreements to source bananas from Andhra Pradesh.
From the second week of December, shipments of bananas from Rayalaseema to northern states began. Following the start of these movements, prices in local wholesale markets showed an upward adjustment. In the Pulivendula market, higher-grade bananas are now trading at Rs 16,000–17,000 per ton (about US$190–200 per ton). Lower-grade fruit is reported to be selling at close to Rs 10,000 per ton (about US$120 per ton).
Andhra Pradesh has more than 300,000 acres under banana cultivation, equivalent to about 121,400 hectares. Estimated production is around 8.7 million tons. Most of this volume is consumed within the state, but the government has set an export target of 200,000 tons for external markets.
After the price decline in November, marketing channels have so far absorbed around 70,000 tons of bananas through these new trade flows. State marketing officials indicated that prices may continue to adjust as movement to northern markets increases.
The recent developments have improved price levels compared with November, providing some relief to banana growers in the Rayalaseema region.
Source: Gulte
