The current price levels of Canary Island bananas reflect the pressure on the supply. "Since the first few weeks of the year, it was warned at source that we were going to have this situation, and this pressure on the product's supply began to become noticeable from the middle of February," says Pascual García Bernal, from Displafruit. "Figuring out what has caused this would require an exhaustive analysis, but from my point of view, we could summarize it in the following points."
"Firstly, there are meteorological factors," he says. "This year, banana plantations in the Canary Islands have suffered damage due to adverse weather conditions. An anomalous winter with unusually cold nights has slowed down the growth of new seedlings and banana bunches. Moreover, since December, there have been several incidents with strong winds destroying many banana plantations and greenhouses on the islands. This has taken a toll not only on the supply, but also especially on the product's quality.
"Parallel to the situation we are going through in the Canary banana sector, the bananas imported from Central America and West Africa have also reduced their presence in the market for various reasons, so the position of the Canary Islands banana has been strengthened, and this has led to prices increasing," says Pascual.
He stresses that "production costs must also be taken into account. Growers are receiving higher prices for their production, which is also a consequence of higher production and marketing costs for everyone involved in the chain."
"Lastly, it should be noted that, despite the price increases, the demand for Canary Island bananas remains high, which, combined with the lower supply, has led to a steady increase in prices," he says.
"The production shortage could last until the summer months"
The price of bananas at source at the end of April stood 179.2% above the average of the last five seasons.
"For DisplaFruit, bananas are the most important product, accounting for more than 60% of the business volume, so, understandably, the current situation is very challenging for us, because we have to deal with the current market imbalance with limited volumes at source and, at the same time, having to meet our commitments to our clients. This is putting us under huge pressure," says the expert.
"There are several factors behind the current situation, and while at source it is said that the lack of production volume could last until the summer months, I'm not so sure that the majority of households in this country and their economy will manage to put up with these prices for long," he says.
"On the one hand, we see that the demand for Canary bananas is still high in Spain. In spite of the current prices, many consumers remain loyal to Canary Island bananas," he says. "It is our own domestic product, and we feel it as such. For many consumers, the act of buying bananas from the Canary Islands is a habit. Its sweet taste and characteristic texture, as well as the food safety and the guarantee of complying with labor rights offered by a product produced in the EU are the keys to its success."
"On the other hand, bananas arriving from third countries are gaining market share due to the price difference with Canary bananas, which already cost twice as much, and this share is going to be very difficult to recover, since there will be consumers who will no longer buy Canary bananas and will stick with imported ones," says Pascual.
Concern about fluctuations in the Canary banana market over the last few years
"The abrupt fluctuations in the Canary banana market over the last few years, due to both excess and shortages in the supply, are a cause for concern, and I believe that this lack of stability is a threat to the future of the product," says Pascual.
"However, I also believe that, even if the supply increases - which it will eventually do - and there's a lower pressure on prices, we are not going back to the levels of previous years with rock-bottom prices," he says.
"I believe that cheap fruit and vegetable products are not coming back. We are dealing with a new reality after a few years of considerable increases in the production costs of all those involved in the supply chains (due to more expensive fertilizers, materials, labor costs, greater tax pressure, etc.), and although we are all minimizing expense to ensure that these supply chains remain efficient, the increases will inevitably end up reflected in the final prices of the products," he says.
For more information:
Displafruit
C/ Belenguera (Pol. Ind. Norte), 45
46230 Alginet, Valencia. Spain
Tel.: +34 96 367 36 02
[email protected]
https://www.displafruit.com/