Global Market Update: Banana

Published 2019년 9월 19일

Bananas are increasingly more demanded over the world. They are currently the most traded fruit. There is one main variety that is cultivated: the Cavendish banana. Generally, production is only affected by weather, but recently there have been fears that a deadly banana disease, TR4, will spread through Latin America.

The 6-digit Harmonized Tariff System code prefix for fresh and dried bananas is 080390.

Price

The price of bananas has remained relatively stable over the last few years. As of September 19, the global average wholesale price is 0.70 USD per kg. In Europe, the wholesale price of bananas has decreased due to increased supply. In China, the price of domestic bananas has increased slightly due to the increase in demand. In the biggest producing country, India, prices have been quite stable.

Production

In 2017, 113.9 million tons of bananas were produced. The main producer was India, producing 30.5 million tons. This was followed by China (11.2 million tons) and Indonesia (7.2 million tons). Production of bananas in Latin America has decreased due to El Niño.

Supply and Demand

The demand for bananas increases year-on-year. In Europe, it is one of the most eaten fruits. It is mostly demanded during winter, as during summertime there is plenty of summer fruit available. China’s demand for bananas also increased. The supply can generally meet the demand, but banana supply is highly dependent on the weather. This can create supply shortages and oversupply, as happened in 2018. During summer, demand for bananas is generally lower.

Export

In 2018, the total exported value was 13.0 billion USD, the total exported quantity was 70.6 million tons and the total exported value grew by 5%.

The main exporters were:

Ecuador (3.1 billion USD, 23.9%)
Philippines (1.5 billion USD, 11.5%)
Guatemala (1.3 billion USD, 10.3%)
Costa Rica (1.0 billion USD, 7.9%)
Belgium (938.8 million USD, 7.2%)

The total exported value in Belgium and Costa Rica declined, whereas it increased in the other countries. The Philippines increased its export value by 43%. The total exported value has increased a lot over the last decade.

As shown in the graph above, the global banana export value has been increasing for the last 10 years.

Import

In 2018, the total imported value was 14.9 billion USD. The total imported quantity was 21.8 million tons and the total imported value grew by 4%.

The main importers were:

USA (2.6 billion USD, 17.3%)
Belgium (1.3 billion USD, 8.8%)
Russia (1.2 billion USD, 7.7%)
Germany (939.4 million USD, 6.3%)
Japan (912.9 million USD, 6.1%)

Total imported value in Belgium and Germany declined.

Trends

Market Recovering from Difficulties in 2018

The beginning of 2018 was a difficult period for banana exporters and importers. Supply from Latin America was low due to bad weather, driving up the prices in Europe. Around May 2018, a large volume of bananas came into the market, pushing the prices down to the other extreme. In summer, demand for bananas is lower due to the availability of other summer fruits. Prices fluctuated heavily in 2018, but so far in 2019, the prices have remained relatively stable. Only China sees some price fluctuations.

TR4 Infections in Latin America

It is highly likely that 2 Colombian plantations have been infected with TR4, a deadly banana fungus. This fungus is extremely hard to eradicate and quickly destroys entire plantations. In the mid-20th century, almost half of Latin American banana production was wiped out due to Panama disease, a related fungus. Latin American countries then replaced their most cultivated variety with a new variety: the Cavendish. If the presence of TR4 is confirmed, it is likely that prices for bananas will increase rapidly. As the disease is hard to combat, efforts are being made to produce resistant banana varieties. 175 hectares were infected, but 168 hectares have been cleared. Latin American countries have grouped together to combat the fungus.

Improving Production in Latin America

Latin American countries such as Ecuador, Guatemala, and Panama are working hard to improve their production. Their total export value has been rising over the last few years. Ecuador seeks to improve its yields, as current yields are still quite low compared to other countries. Panama has started to export to the US, and Guatemala is focusing its sights on the East Asian market.

Canary Islands and Spain against Liberalization

The Canary Islands, one of the main banana producing regions in the EU, is strongly against European plans to liberalize trade with Colombia, Ecuador, and Peru. They fear that European production will suffer from this move. Spain stands behind its islands and argues against easing phytosanitary agreements with the Latin American countries. In 2018, there were significant shortages in supply from the Canary Islands, causing prices for European-grown bananas to soar.