The battle for summertime consumer preference has always been a tricky one for staple fruit lines in the UK with sales slow as products such as bananas, top fruit and exotics lose out to in-season soft fruit and the school summer holidays traditionally add to this in the absence of lunchbox filling.
But this year, sales have held up much better, down around 10 per cent through July and August. One importer expressed surprise: “Prices have stood up remarkably well through the summer months, especially in the wholesale sector. Normally, there would be a significant lack in demand but volumes from Central America and the Caribbean have been noticeably less and so, with availability down, fruit price has been firm in July and August.
“Climatic conditions do change from year to year and throughout the year, the ebb and flow of bananas from various countries differ as the production curve changes.”
On the whole, however, local climate has presented few severe difficulties for producers in the last three months. Hurricanes Ana, Bill and Charlotte heralded the beginning of the twister season, which is set to last through to the end of September with widespread inclement weather in the Caribbean possible through November and even into December. On August 15, the first two tropical storms, Ana and Bill, developed in the relative vicinity of the Cape Verde Islands, marked the latest date since 1992 when the season’s first tropical cyclone was named in the Atlantic basin. The Dominican Republic was the only banana-supplying country under threat but the storms broke up either side of it, although it seems very possible hurricanes could well trouble producers this year.
Elsewhere in the country, the government has announced it will invest more than RD$16 billion (£273.4 million) in farm projects for greenhouse and in-vitro production. In announcing the move, minister of agriculture Salvador Jimenez said the plans were a major step in fighting rural poverty in the region.
As importers continue to look for options to supply demand at all times, the possible introduction of banana exports from India will doubtless attract interest. India is the world’s largest banana supplier and recent reports that the Indian Agricultural Processing and Export Development Agency has declared Maharashtra, the country’s largest banana-producing region, an international agricultural export zone will come as interesting news as India looks to extend its supplies beyond its destinations in the Middle East.
But one supermarket supplier tells FPJ there is still work to be done before large volumes of Indian product hit Europe and the UK: “We are looking into it but are yet to find any partners with product that can be expected to meet any of the EU and the UK’s high quality specifications. It is definitely going to take time to get Indian product over here; it is not going to happen overnight. The volume of fruit is definitely there and it meets local needs at the moment, but the standards for the EU will take some work to achieve.”
The last three months have seen a number of interesting moves in the banana sector. Despite the continuing financial challenges facing international companies created by fluctuating exchange rates, Chiquita reported its best quarterly results for a decade with strong second-quarter results for 2009 last month - net sales decreasing by four per cent to $955 million (£570.8m). The company reported income from continuing operations of $89m, up from $58m in 2008. On a comparable basis, income from continuing operations in the second quarter was $95m against $55m in the 2008 period. But Chiquita continues to put a considerable focus on its other brand activities, launching a major campaign for its salads through Fresh Express in the US and announcing it is to provide pineapple sticks to McDonald’s in Europe as it continues to rally during the recession. Meanwhile, Dole decided to float on the stock market last month to offer shares of its common stock publicly to raise up to $500m through an initial public offering, while Del Monte received a boost in the form of an increase in its corporate credit rating from BB- to BB by independent credit assessors Standard & Poor’s.
Shippers have had fluctuations in the international fuel market to deal with this quarter, with IFO oil prices in Rotterdam presenting challenges to budget. The mean average price went from $401 per tonne up to $429.5 in early August and ended the month at a base price of $434 after a fall mid-month.
Looking ahead, one insider says the autumn period could be a prosperous one for the banana sector: “It could be mid-September before supplies become more readily available but, by then, demand should have picked back up to normal levels for the time of year and prices should remain good for quality fruit. For the next few months, it is a case of watching the weather and the markets.”
PORTSMOUTH PORT STEAMS AHEAD
Having handled bananas for some years in other ports, I had the foresight to persuade MMD owners and directors to build a unique quayside facility for handling bananas, writes David Spencer, commercial manager at the port of Portsmouth.
We built this in 1986 and developed it in conjunction with one of the UK’s leading banana importers - from these early days, the port has built up its reputation for fruit handling and distribution and has always prided itself on the expertise of its staff and their ability to be at the forefront of innovative techniques for storage, handling and ancillary services.
From these early days when banana handling was a labour-intensive stevedoring operation and cartons were loose stowed within the ship’s hold, we handled around 85,000 loose cartons with a ship arriving at the port at 10-day intervals. Eventually, palletisation took hold and, almost overnight, changed the whole industry - our European counterparts had invested heavily in machinery to handle loose cartons and this eventually lead to them being mothballed.
Today, ships are now arriving with us on a weekly published schedule 52 weeks of the year - our only day off being Christmas Day!
We have always listened to our customers when developing add-on services and one of the major concerns was one of distribution and how they could best manage their own distribution and collection service - hence the reason for operating the terminal 24/7.
Other changes within the industry have been the ever-increasing use of refrigerated containers - from ships carrying bananas underdeck with 12 containers on deck to the modern reefer ships capable of carrying up to 240 containers on deck. This has enabled operators to carry full cargo underdeck with extra capacity on deck in containers with different temperature regimes. Greater emphasis has been put on the use of containers and, only recently, has demonstrated the higher volumes that can be achieved, when two ships arriving and discharging in the same week meant the terminal handled 13,000 pallets bananas and pineapples.
The unique position of Portsmouth as the first deep water terminal in the English Channel with temperature-controlled holding facilities and unparalleled access to the UK motorway network have all led to its success.
Over the years, we have experienced severe market changes due to climatic conditions in the tropics and this had led to a reduction in service and inevitable late arrivals. These are situations which severely test resources, however, we always rise to the occasion and have managed to cope with these pressures. UK customers and shipowners know our reputation; it is not unknown for them to turn to us for assistance when scheduling problems occur at other ports.
We are always considering our future within the business and continually looking for opportunities to improve our service levels - installing Microsoft Dynamics Warehouse Management and Linkfresh ERP solution with web-based portal access for customers; new generation mobile harbour cranes; new reachstackers with 45-tonne capacity and six-high stacking. Other recent major changes within the citrus traffic has seen the Maroc service migrating to using 45ft high cube reefers capable of loading 26 pallets - these are all unstuffed within the terminal and distributed via our large fleet of refrigerated trailers.
These are exciting times for this business and with new owner, Portsmouth City Council, we go forward with a positive attitude.
No comments yet