For most of the year the banana market enjoyed relatively stable conditions, with spot market prices remaining high and volume sales in the UK achieving modest growth of 0.3 per cent. Consistently high prices saw value increase to the tune of £18 million, a rise of 3.2 per cent [Kantar Worldpanel, 52 w/e 7 October].
But recent weeks have thrown up a gamut of issues, typical to a sector built on large-volume international trade, as riots, strikes, delays and oversupply have given importers and traders something to think about. Throughout the year delays from new “super-vessel” ships, which take longer to load and unload, have helped push prices to unprecedented levels of nearly £20 per box on the spot market.
Damian Whitehead, who founded new company Belva Produce in October this year, says prices have sharply dropped, however, thanks to a sudden oversupply of fruit. “The industry has been more or less stable this year from January up to October but it just seems to have really started to unfold in the last few weeks. There’s been a 25 per cent dip in price in the past three weeks.”
With 18kg boxes now trading at £7 to £10 each, Whitehead says a slowdown in the market is typical for this time of year, especially after winter half term, but this year was pronounced. “You tend to get poor quality fruit after the holidays because of its age and you get this downward spiral in price.”
One of the biggest geopolitical influences on the market was a national strike in Costa Rica, creating a hold up at the port of Moín at the start of September. Walkouts in the Central American country were sparked by government tax reforms, with the port only operating six hours a day, and national unrest seeing roads closed by riots and burning vehicles.
João Barata, procurement director at SH Pratt Group, says: “It has been another interesting year. We have had no issues with banana availability but the problems with shipping were big due to delays related with weather conditions and also lack of containers in origin. The price of bananas on the spot market at origin hit records. Some weeks ago there were strikes in Costa Rica that impacted the industry for several weeks.”
Whitehead says the strikes created a backlog of bananas, which then arrived in the UK at the same time: “The strikes were part of the catalyst for the downward spiral. It was a double whammy, due to the excess fruit in stock and the slowdown in demand.”
With the strikes ongoing in Costa Rica, it’s unsure how they will continue to affect the port of Moín. Nevertheless, Whitehead says working out his 2019 shipping programme is the next step for him and his new company.
SH Pratt says it is also continuing to improve its logistical methods. “We are working on several projects at the same time to offer different and original solutions to our customers. We are working on new solutions for packaging, giving priority to new packaging developments on ecologically and environmentally friendly and recyclable products. On ripening we will keep changing our system to Smart Harvest and we will introduce the FIPS system for ripening, planning and stock control.”
