Global banana giant Chiquita has reported significant year-over-year increases in banana prices in all markets for January-February 2008 on flat or lower volumes.
“We are pleased that banana pricing remains favourable,” said Fernando Aguirre, chairman and chief executive officer. “At the same time, flat to lower banana volumes reflect industry-wide constraints on availability, due to a series of adverse weather conditions throughout Central America and Ecuador. In addition, rising industry and other product supply costs continue to impact our results.”
The company previously announced that in 2008 it expects significantly higher industry costs, especially for items such as fuel and raw product.
North American banana pricing was up 10 per cent year over year, reflecting increases in base contract prices and higher year-on-year surcharges linked to a third-party fuel price index that helps recover significantly higher costs. Banana volume sold in the region was flat due to a series of adverse weather conditions throughout Central America, as well as prolonged rainfall and major flooding throughout the banana growing areas in Ecuador, that have substantially constrained industry-wide volume availability.
Banana prices in the company's core European markets were up seven per cent year on year on a local currency basis. After having fallen 14 per cent in January, volume sold in the core European markets began to recover and was down 11 per cent year over year for the January-February 2008 period, due to the constrained industry-wide volume availability, the cancellation of lower-price contracts due to a rising cost environment, the company’s strategy to maintain and favour its premium quality product and price differentiation over market share, and the timing of the year-end calendar.
No comments yet