Lower fuel costs and the increased availability of containers have transformed the global banana business, bringing more markets within reach of suppliers, according to Juan David Alarcón, CEO of US marketer Turbana.
Speaking about the evolution of the banana business and international market trends and the International Banana Congress in Miami this week, Alarcón said the rise in containerised cargo has democratised the banana business by making it easier for smaller suppliers to reach more distant markets and enabling buyers and sellers to connect more easily, without the need for intermediaries.
Previously the only option was to use specialised reefer vessels where shipments had to be a minimum of 150,000 boxes and the cost per box was much higher.
“On the downside, this means that markets can get more easily disrupted by speculators,” he added.
Alarcón said trade flows had changed considerably across the globe, with the container lines having a major impact in areas like the Mediterranean, where containerised cargo now accounts for 60 per cent of all banana shipments, and China.
As a result, reefer operators have had to redefine their market strategy by offering fast, direct and dedicated (FDD) services between loading ports and specialist reefer terminals. He said companies like Seatrade were now taking a proactive approach by building a new generation of dedicated reefer container services.
Together with logistics, Alarcón noted that geopolitics, exchange rates, economic uncertainties and changes to import regulations were all having a major impact on trade and would continue to affect the industry in the years ahead.
On the plus side, he said the growth in direct sourcing by retailers like Walmart and Tesco meant they had a better understanding of production and trade and therefore more realistic expectations of the industry.
