Climate change threatens banana supply, report finds

Yield fluctuations, increased water demand, severe weather events, and heightened disease pressure are placing significant risks on the banana supply chain according to a new report by RaboResearch.

It reveals that the US and EU’s heavy reliance on a few Latin American countries for bananas could lead to increased competition and higher risks unless stakeholders – including farmers, importers, and retailers – take timely action.

Bananas are the most consumed fruit globally, yet regions like the US and EU, where bananas are not domestically grown, are heavily dependent on imports. These regions source bananas primarily from Latin America, with Ecuador, Colombia, and Costa Rica accounting for 73 per cent of EU imports, and Guatemala, Ecuador, and Costa Rica making up 76 per cent of US imports.

“With climate change taking effect, risks increasing, and market prices insufficiently compensating for increased costs and risks, it is unclear whether this concentrated sourcing strategy will remain viable for the EU and US markets,” said Camila Bonilla-Cedrez, specialist F&A climate and sustainability for RaboResearch.

Yields in countries like Colombia and Panama are already affected, and disease risks are rising across the region.

Climate change has varying impact across regions

Bananas thrive in tropical climates, with specific temperature and water needs. According to the report, climate change is altering these conditions, affecting yields differently across regions, both directly through effects on the growing environment and indirectly through the prevalence of pests and diseases.

Changes in temperature and rainfall patterns could also shift banana cultivation to new areas while making current ones unsuitable. Effective crop management could mitigate some impacts, but the challenge remains significant, RaboResearch states.

Global banana yield gains may decline by 2050

In recent decades, many banana-producing countries have seen yields increase due to climate change, particularly countries where warming has resulted in more optimal temperatures for banana production. However, by 2050, major banana-producing countries, including India and Brazil, are expected to see declining yields due to climate change, the report finds. This trend also affects key exporters like Colombia and Costa Rica. In contrast, African nations and countries like Belize and Ecuador may benefit from climate shifts, potentially increasing their yields.

Climate change not only affects quantity but also the quality of bananas. High temperatures and excessive rainfall can degrade fruit characteristics such as weight, firmness, and colour, leading to increased postharvest losses.

Increasing climate resilience and supply diversity is key

According to RaboResearch, the US and EU banana supply could face disruptions unless proactive measures are taken. “While Ecuador and the Dominican Republic might maintain stable positions, the US and EU’s reliance on a few suppliers like these increases competition and risks. If shortages occur in other markets, demand for Ecuadorean bananas could surge, potentially leading to contract breaches and supply chain disruptions,” the report states.

Farmers, traders, and government can cooperate to increase climate resilience

Farmers are adopting climate-smart practices to combat pests and diseases, improve fruit size, and enhance overall plant health. Improved water management is crucial as precipitation becomes unpredictable. “Importers and retailers should reconsider sourcing strategies to ensure future supply. Diversifying sources to include African and other Latin American countries could reduce risks and encourage investment in alternative production systems,” Bonilla-Cedrez said.

Investment in climate-smart practices

The report notes that changes in sourcing strategies should involve co-investments in climate-smart farming practices to foster a robust and sustainable banana industry. Higher prices are essential to support these investments, as current farmer margins are insufficient for significant climate-proofing without support from downstream players, governments, and development agencies.