Weekly Product Updates

W42: Banana Update

Fresh Banana
Published Oct 27, 2023

In W42 in the banana landscape, the first meeting of Ecuador's Banana Advisory Council, held on October 17, concluded without a consensus on the new minimum support price (MSP) for bananas in 2024. A second and final meeting was scheduled for October 24. The export sector proposed maintaining the MSP at the current value of USD 6.50 per 43-pound (lb) box, citing concerns over potential global market competitiveness losses if prices were raised. In contrast, the producing sector proposed an increase to USD 8.01/box, while the Regional Corporation of Ecuadorian Banana Growers (Agroban) recommended a price of USD 7.25/box.

Additionally, there was a proposal to raise the minimum free-on-board (FOB) reference price from USD 2.16 to 2.75/43-lb box. Export sector representatives emphasized the international markets' sensitivity to price increases driven by high inflation. They also stressed the need to maintain prices to avoid a potential decrease in purchase volumes. The discussions will continue in the hope of reaching a consensus, with the Ministry of Agriculture and Livestock (MAG) having the final say if an agreement remains elusive.

According to the National Supply Company (Conab), Brazil’s wholesale banana prices decreased in Sep-23. This was attributed to a surplus of silver-variety bananas from both the southern and northern Minas Gerais regions, with rapid ripening resulting from rising temperatures. Furthermore, most wholesale warehouses experienced a significant drop in sales, partly attributed to the extended holiday on September 7, 2023. Brazil’s total fruit exports amounted to 694 thousand mt, valued at USD 794.8 million in the first nine months of 2023, a 5.14% year-on-year (YoY) increase in volume and a 19.04% YoY growth in value. However, there were reductions in shipments of bananas, dropping by 26.7% YoY.

The Association of Independent Banana Producers of Guatemala (APIB) expressed deep concerns regarding the impact of nationwide roadblocks initiated on October 2. These roadblocks have significantly affected the national banana agro-industry, disrupting supply chains and causing substantial financial losses. The situation raises the imminent risk of temporary shutdowns, which could have severe consequences for the livelihoods of 180 thousand direct and indirect employees throughout Guatemala. Primary agronomic and labor operations are jeopardized, with inventories for combatting plant-endangering pests and diseases dwindling. The APIB has called upon president-elect, Bernardo Arévalo, to reconsider his stance on road closures and urged authorities to safeguard the right to free movement for citizens not involved in the blockades.

Lastly, Vietnam is actively expanding its fruit exports, particularly bananas and durian to China. However, the issuance of growing area codes has faced challenges, with 750 violations recorded in the first nine months of 2023. This situation resulted in the revocation of codes for various growing areas and packaging facilities. This has had a significant impact on the crucial fresh fruit export market, integral to Vietnam's economic growth. Dong Nai province has been a leader in this effort, with rapid growth, adding 49 new growing areas covering nearly 4.9 thousand hectares (ha) and 28 packaging facilities within the first nine months of 2023. The province excels in exporting durian and tissue-cultured bananas, with codes that grant access to global markets such as China, the United States (US), Europe, Australia, and New Zealand. Despite recent setbacks, stakeholders are working to enhance cultivation practices, maintain export standards, and adhere to plant quarantine regulations.

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