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Russia and China great markets

Fairtrade bananas unknown in Poland

The Polish banana market is different to the Western European market. Here you will find no supermarkets that import bananas, and Fairtrade bananas are still unexplored territory. The pressure on prices, however, is similar, with discounters driving prices down. Marek Szulc, of Citronex, gives an insight into the Polish banana market. He talks about challenges for the company and the banana market and the growing demand from China. The Russian boycott has not affected Citronex; the company actually sees opportunities in it.

"Our main market is Central and Eastern Europe," says Marek. "We work with the largest supermarkets in Poland." Retailers who import bananas themselves are not yet putting pressure on the Polish market. "We'll see that trend, but the supermarkets are not yet ready to do it all alone. There is a lot involved in the banana trade, and we at Citronex rely on our twenty years’ experience. Additionally, supermarkets don’t have large enough ripening facilities."

Discounters put prices under pressure
The average price for a kilo of bananas stands around one Euro. "The biggest supermarkets in Poland are discounters, so the price is an important issue. Sometimes, this makes it difficult for growers and importers like us," says Marek. Citronex tackles this by focusing on quality. "We work with the best quality suppliers. Thanks to our own plantations and our large import volumes, we can provide the best quality at the best price."

While there is still no price war between supermarkets in Poland, Citronex see this rather as a challenge for the future. "At the moment this is not an issue, but a price war between supermarkets would primarily affect growers and exporters. Ultimately, the consumer suffers under it, because the quality of bananas is lower. Growers unable to cover their costs will simply stop investing."

Last summer, banana prices were high. "In addition to our own plantations we also purchase bananas from other growers we have been working with for years. We’ve had to explain to our customers that the costs and the price of bananas in the first stages of the chain were higher, and that we therefore had to increase our price."

Fairtrade banana unknown
Although the Fairtrade banana market in Poland is still in its infancy, Citronex is trying to get certifications. "In our main market, which is Poland, there is no real market for Fairtrade bananas, but we at Citronex want to be at the forefront of new developments. Additionally, Citronex has Global Gap and Sedex certificates and a National Quality Certificate of the Ecuadorian government.

Russia still great market
Russia is also an important market for Citronex bananas. The company has faced no disadvantages because of the Russian boycott on Polish exports; in fact, sanctions have had a positive effect. Citronex exports bananas directly from plantations in Ecuador to Russia, about 80,000 boxes weekly. "Due to the boycott, the import and consumption of bananas has increased in Russia, which is good news for us because Citronex is also located in Ecuador, and thus we can export."

The biggest challenge for the sector as a whole is extreme weather conditions. "Extreme weather, such as hurricanes and heavy rains, are becoming more frequent. The impact these have on the cultivation and quality of bananas is the biggest challenge for the sector."

Growing Chinese demand
Another challenge lies in China's growing interest in bananas from Ecuador. The import of South American bananas in China has sharply increased in recent months. In the first half of this year, China imported 217,000 boxes per week; that equates to a total of 4.12 million boxes or 70,000 tonnes. Throughout 2013, China imported 20,000 tonnes of bananas from Ecuador.

"There is a separate type of consumer in China who only wants top quality," states Marek. "We found that Ecuador has the best bananas and it is also the only country that can handle the long shipments. For us as a grower and exporter, this is a good development, because we have a new market. As an importer, this is not a positive situation, because prices will increase in the face of the currently growing demand."

More information:
Marek Szulc
T: +48 757721943
F: +48 757721945
E: [email protected]