The banana sector is never without its challenges, but this does feel like a time of greater complexity than ever before. Whether it’s the creeping threat of TR4, weather challenges, supermarket price pressure, the impending EU free-trade deal with Colombia and Ecuador or the uncertainty of Brexit, there’s plenty to think about.
Jorge Sauma, the convivial general manager of Costa Rican banana corporation Corbana, is taking it all in his stride. He’s seen it all before, and recently his focus has been on the yo-yoing production following bad weather in 2015, which saw output plummet to just 101 million boxes, before shooting up to a record high of 121m a year later.
“This year we have the same level of production, but the market is so complicated because there has been too much fruit from Colombia, Ecuador and the Philippines, and the temperature was high in Europe leading to lower consumption,” he told Fruitnet at the International Banana Congress in Miami. “It was difficult to relocate all this fruit but the situation is better now. There’s more consumption and maybe the market will recover a little bit.”
Costa Rica prides itself on its high social standards, and the country’s producers have reached a point there there is zero waste going into rivers, reducing chemical applications through its Banaclima programme and further work in water recycling. “We are still investing in trying to become better,” he says. “We already have 10 years of our biological control laboratory and molecular biology and we are intending to do further biological control as we move forward.”
The introduction of a free-trade agreement between the EU and Colombia, Peru and Ecuador threatens to create a new dynamic in a market that was finally settling down after years of wranglings over tariffs, and Costa Rica is watching developments closely. “We were fighting for 19 years and only had 10 years of peace, and it will become a difficult situation when the market opens up totally,” he warns. “But I feel that the market will adjust.”
At least consumption is rising in Europe, and that will help with the additional banana tonnage arriving on the market, with countries such as Guatemala having increased production significantly. Greater demand might help with retail prices too – an ongoing concern in the banana sector, which has long complained that shelf prices do not reflect production costs.
“There is a problem with this war of the supermarkets,” Sauma says. “The problem is when they are fighting to the lowest price I consider that it’s not fair to do that with fresh produce like bananas, because the weakest part of the chain is the grower, and all the pressure will go to the grower. A German consumer told me that the banana is very low priced when compared to the rest of the fruit. It’s not fair. When you produce bananas you take on a lot of risk – hurricanes, high temperature, plagues, diseases etc. It’s very important to get a fair price.”
Whether there will be any price uplift is debateable, but with consumption strengthening Costa Rica should be well positioned to take advantage of the increasing demand.
