Issues around supply, potential hurricane damage, and a decrease in consumption in the summer months are the big talking points in the banana market at present.
Of course, some involved in the trade have a different outlook to others, although everyone FPJ spoke to reported strong demand over the last quarter.
One interesting move recently enacted by retailers could see that rise as well.
Toni Direito, commercial director at Compagnie Fruitiere UK, says: “The retailers are starting to attack the pre-pack pricing. They are now moving their attention to price deflate, and so the 80p finger pack is now here. That is a good offer in theory, but loose is still cheaper at 68p a kilo.”
As for growing conditions, Direito says: “The regions we source from have been rather stable with no major issues seen, but the key will be the next few months as we start to see the weather changes and the impacts of hurricane around the Dominican Republic.
“This could greatly affect the supply of organic and organic Fairtrade if we are not careful.”
Simon Trewin, commercial director at SH Pratt, echoes these concerns: “We’ve seen seasonal droughts in the Caribbean, leading to some shortage of supply, especially with small bananas,” he says. “We have concerns also that El Niño in the Pacific will prompt hurricane damage through the hurricane season.”
Direito paints a sitcom-esque picture of the current supply and demand conditions in the UK market when he tells FPJ: “Demand is strong, but supply is very tight. Everyone is running low on stocks and chasing fruit off the next
vessels.”
Again, Trewin – who says the market is “flat” year on year - echoes this, calling supply “adequate but not strong”.
Harley Williams, business development manager at BanaBay, sees things differently, however: “Ecuadorian imports have remained stable, though spot availability has been lower (free on board prices are on the up).
“Most of all, the early start to the summer programmes by certain operators is aiding management of volumes during the seasonaltransition.”
Those in the banana trade are now preparing to enter the part of the year where demand for the product tends to droop.
Williams says: “Shortly we will move into the low season for tropical fruits and traditionally expect the demand and sale prices to fall.
“We have very recently introduced plantains into the UK, and through our broker, Fruesh, we are finding that this market is very unpredictable with prices changing drastically from one week to the next without apparent reason.”
Direito adds: “Personally I think people are shopping more frequently but consuming less. Overall banana sales are not where they used to be as more attractive products come into fruition during the summer months.”
Williams notes that the price fluctuation is mirrored in the Netherlands, where BanaBay has also started bringing in one container of plaintains a week.
He tells FPJ that the firm’s freight relationships are “stronger than ever”, meaning that a large proportion of the price increases in Ecuador – the firm’s key supply nation – have been absorbed by reductions across the board in freight prices.
Going forward, Direito is excited by the work being put in by the retailers to boost the category: “Sainsbury’s are doing a good job with the rebalancing of the category and tiering, while Aldi have had a strong performance with a key offer across the board.
“I’m sure Tesco will have a resurgence over the next few months and start to make headway in the category too.”
Trewin, meanwhile, expects the category to stay static while retail prices remain in the “current status quo”.
