Banana

INFOCOMM

COMMODITY PROFILE 

 BANANA

Of the agricultural products, the banana is the fourth most important food product within the least developed countries, being the staple food for some 400 million people (1). Of all the fruits, it holds first place by production volume and is amongst the five most consumed fruits on the planet (2).

Some 1,000 varieties of banana trees have been identified in more than 150 countries, producing around 105 to 120 million tonnes (Mt) of fruit a year. There are two main families: the sweet banana or “fruit”, essentially the Cavendish variety, which represents around 60 to 65 Mt (3) , and the cooking banana - particularly the “plantain” in Africa or the “pisang awak” in Asia - consumed more as a vegetable, which represents around 40 to 50 Mt (4) . Both are mainly autoconsumed as only around 14 Mt of fruit bananas, generating $ 7.9 billion (2009), are traded internationally. Exports of the plantain banana are increasing but still remain a little known and limited market compared with the fruit banana.


 

Table 1. BANANAS: PRODUCTION OF FRUIT BANANAS AND BANANAS PLAINTAIN (Mt)

 

Region

Cavendish

Other types of 

dessert banana

Cooking bananas

(ABB, AAA, EAH)

Bananas

plantain

Latin America
17 714  5 247    849  6 742
Caribbean
 1 302     301    597    939
Mediterranean
 1 713        7      8     -
Eastern and Southern Africa
 1 810     737 13 370  1 275
Asia  2 729     536  1 140  9 002
Western and Centra Africal
20 625  5 440 10 010    834
Pacific      316       65    543       1
Total 46 212 12 520 26 520 18795

Source : : Lecot 2008 from FAO CCP:BA/TF09/7, Rome 9-11 décember 2009

Almost all southern hemisphere countries produce bananas. Around 90% of production is for autoconsumption, providing 12 to 27% of the necessary daily calorie intake. In Uganda, consumption amounts to 243kg per person, with 100 to 200kg in Rwanda, Cameroon or in Gabon against 10kg on average in the United States or in Europe.  
Moreover, the world’s top three producers – India  (18.5 Mt in 2008), China (7.4 Mt) and Brazil (6.6 Mt) (5) - are not the main exporters, even though Indian exports have increased the last few years, going from 6 300 t exported in 1999 to 45 800 t in 2009, according to the FAO, at an almost steady annual growth rate.


The cultivation of bananas for export is delicate and costly because the plant is very fragile.  It can currently be seen that the spread of diseases, such as fusarium and black leaf streak disease (BLSD), is accelerating, linked to globalisation and increased movements of vegetable material. As such, bunchy top disease, previously widespread in Asia and the Pacific, has now reached Africa, much like bacterial wilt previously affecting Latin America(6). This increases the number of treatments needed and therefore the cost, and creates environmental pressures on the export markets. This could eventually lead to a change of production regions in favour of regions that are less susceptible to the development of diseases(7).


To meet these requirements of sustainability of production, international research is more and more active be it on ecological intensification(8), genetic modification or the organoleptic qualities of bananas(9)  in order to diversify the offering to consumers.  Research also tends to improve yields which are 40 t/ha on average for the Cavendish, with peaks of 44 to 59 t/ha in Latin America, lows of 30 t/ha in the Caribbean, and Africa fluctuating between 25 to 60 t/ha(10).

 

EXPORTS

International trade in bananas has tripled between the 1970s and today . But world trade is still characterised by a high concentration of key players: five countries, four of which are in Latin America - Ecuador, Colombia, Costa Rica, Guatemala and the Philippines - represent 11.6 Mt of exports (2010) out of a worldwide total of 13.9 Mt, i.e. 83%.


 

Table 2 BANANAS: EVOLUTION OF WORLD EXPORTS

Year 

Thousands

 of tons

2000 11 922,10
2001 11 621,80
2002 12 251,40
2003 12 981,00
2004 12 898,20
2005 13 294,00
2006 14 276,80
2007 15 025,50
2008 15 092,00
2009 14 919,00
2010 13 893,70

 

Source : FAO, Bananes Statistiques 2011, CCP:BA/TF11/CRS1

ACP countries represent just over one million tonnes of exports, i.e. less than 10% of global exports on average, of which 70% is concentrated on three countries making more than 200 000 tonnes: the Dominican Republic which exceeded 300 000 t particularly thanks to fairtrade and organic bananas, the Ivory Coast and Cameroon which fluctuate between 200 000 and 250 000 t. Three other countries, Surinam, Belize and Ghana made between 50 000 and 100 000 t: (it should be noted that from 2006 Ghana saw a marked increase, in particular with the new plantations of the Compagnie Fruitière coming into production, going from 1 900 t in 2005 to 57 500 t in 2006, then 70 000 t in 2008 and 83 700 t in 2010, according to figures from the FAO, so becoming the 6th supplier of bananas amongst ACP countries). For their part, Dominica, St Lucia, and St Vincent remain under 50 000 t. Jamaica, Grenada, Madagascar and Cape Verde no longer export (12) either because they are unable to compete at the international level, or due to the proliferation of diseases such as Panama disease in Madagascar.


The European Union produces around 600 000 t, including Spain with the Canaries, France with Guadeloupe and Martinique, Greece with Crete and Laconia, as well as Portugal with Madeira, the Azores and the Algarve. In 2008, 72% of bananas sold in Europe came from Latin America, 17% from ACP countries and 10.5% from the European Union (13) .

Bananas: production of EU 

2009, thousands tons

France 235,8
    - Guadeloupe  55,6
    - Martinique 180,2
Spain (Canary) 352,0

 

Source: FAO, Bananes Statistiques 2011, CCP:BA/TF11/CRS1

 

More than 80% of the global banana market is controlled by four multinationals – Chiquita, Dole, Del Monte and Fyffes. Historically, these multinationals – essentially implanted in Latin America and in the Philippines, Dole being in Cameroon and the Ivory Coast via an interest in the Compagnie Fruitière - were completely integrated, from production to marketing. However, the removal of import licences on the European market and containerisation have, first of all, considerably stretched the links between downstream operators and producers. These links are being reestablished to meet the requirements of just-in-time supply and the zero stocks policy, but multinational businesses can make greater use of outsourcing for production, by requiring contracting producers to become certified in order to better ensure traceability .
Moreover, with the 2009 Geneva Accord liberalising the import regime within the EU, it is highly likely that the increase in production and the growth in trade will not benefit all countries that currently export bananas, particularly the ACP countries, due to the ever increasing requirements relating to the environment, food safety and commercial policies which make accessing the markets all the more difficult and costly.
Other dominant trends — since 2008 India has been interested in developing its exports, particularly to the EU. At the same time, Chinese production continues to grow at a sustained rate, which could impact on the Philippines whose bananas currently represent 85% of total Chinese imports . It should be noted that in 2010 Ecuador negotiated agreements with China, and with Iran and Libya, in order to gain access to their markets .

 

IMPORTS

The EU and the United States between them represent more than 8.6 Mt of bananas traded worldwide . Whilst Iran showed a drop in its imports in 2009, Syria, Turkey, the Emirates, Tunisia and Egypt have experienced a sharp increase in the second half of the 2000s with strong economic growth recorded in some of these countries and with them increasingly opening up to international markets. As far as Iran is concerned, traditionally more than 80% of bananas on the Iranian market came from the Philippines (428 700 t exported in 2007 and 250 600 t in 2009) via Dubai with a licence granting system. But, no doubt wanting to protect its own production, Iran reduced its licences to operators from Dubai.
The market is going through a veritable revolution following the signing in December 2009 at the World Trade Organisation (WTO) of the agreement between, on the one hand, Latin American countries and the USA and, on the other hand, the European Union (EU) and ACP countries, putting an end to the preferential market of the primary global importer, the EU, with regards to ACP countries, by 2017. On 3 February 2011, the European Parliament initialled it. It would seem that the hatchet has been buried after 20 years of conflict. It is still hard to measure the impact of this new international order, but it will without doubt be profound, as much on the European market in terms of the organisation of commercialisation and of volumes imported, as at the production level itself, particularly in ACP countries.
It should be recalled that in 1993, the EU created the Common Organisation of the Market in Bananas (COMB), granting duty free access but subject to quotas (775 000 t) to ACP bananas on the Community market, whilst Latin American bananas were subject to an import tax of 176 Euros per tonne and a quota of 2 553 t: as for European importers, they were organised via the granting of import certificates. The implementation of the COMB in 1993 had become necessary in order to ensure the free movement of this product without undermining productions in ultraperipheral regions of Europe and ACP countries. The regime was contested by Northern EU countries, particularly Germany, which almost exclusively imported Latin American bananas and found itself forced to pay a high customs duty as a result. It should be noted that at the request of German importers, the German government appealed to the Court of Justice of the European Communities (CJEC) in May 1993 for it to be cancelled, considering the COMB to violate the old GATT rules. The appeal was rejected by the CJEC which judged the COMB to be legal, highlighting the primacy of the EU Common Agricultural Policy over competition policies.
The COMB was especially contested before GATT and then the WTO by Latin American countries and multinationals involved in Latin America who were successful on several occasions. Already amended in 2006 (lifting of quotas), the COMB was completely demolished in December 2009.
According to the Geneva Accord (Geneva Agreement on Trade in Bananas, GATB), the import duties on Latin American bananas (“dollar bananas”) will go from € 176 to € 114 per tonne in 2017 at the earliest and by 2019 at the latest, in seven stages commencing 1st January 2011: € 143, € 136, € 132, € 127, € 122, € 117 and € 114. The EU implemented the first reduction of € 28 per tonne to € 148 retrospectively on 15 December 2009; the second reduction to € 143 took place on the 1st January 2011 .
However, a new blow, on a bilateral basis this time, was dealt to the preferential regime for ACP countries when, in May 2010, under the impetus of Spain which held the EU presidency at the time, a free trade agreement was made between the EU, Peru and Colombia, reducing this import tax to 75 Euros over ten years. Only Ecuador remains subject to the tax of 143 Euros. Remember that three quarters of bananas consumed in the EU come from Latin America.
To help ACP countries deal with this new market situation, the EU promised € 190 million in Banana Accompanying Measures (BAM)  to help the industry develop in ACP countries and improve its competitiveness on the export markets. By mid-June 2011, the budget had still not been distributed even though a first tranche (€75 million) was available .

PRICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: UNCTAD STAT

The second part of the 2000s was very positive for bananas, with prices being supported by a fall in supply and… the economic crisis! As such, the average import price in France went from € 603 per tonne between 2000 and 2005 to € 863 on average for 2005 to 2010; at the beginning of 2011, it had passed the € 1,000 per tonne mark. In the United States, it progressed from $499 to $752.5, passing the $900 mark at the beginning of 2011.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: UNCTAD STAT

 


Like other raw materials, prices increased significantly in 2008, and this rise was consolidated in 2009: climatic vagaries, the strong rise in oil prices which affected the whole chain (inputs and international transport costs, etc.), the falling dollar, fall in supply from the Philippines, constant demand from consumers, competitiveness of the banana compared with other fruit, have all been drivers for this increase. In general, this price increase was passed on to the consumer in 2008, with all fruits increasing, but was then corrected downwards, with supermarkets often using bananas as loss leaders and the emergence of fierce competition amongst fruits: in 2010, Europe’s import reference price, Aldi’s “prix vert” (green price), fell by 4% to € 13.5 per box .
2010 was a year of great fluctuations, the European market reacting by turns to an oversupply in bananas, then to soaring prices in competing fruit, to the 17% increase in exports from Colombia in August and finally to unpredictable weather. In January 2011, the price reached a historically high level. Given this, American demand is up by 20%, as the crisis prompts the consumption of this cheap fruit which comes onto the market free of customs duty. A market which is, however, structurally sealed off by the multinationals and inaccessible to bananas from ACP countries.

NEW MARKET SEGMENTS

Banana demand should continue to increase between now and 2019  particularly thanks to demand from emerging countries such as China (+9.2% in 2008) . However, the Chinese market is very complex, a bilateral quarantine agreement for each type of imported fruit having to be concluded in advance between the Chinese administration and the exporting country . Another growing segment is bananas marketed under Fairtrade and GlobalGap (good agricultural practices) labels, but also organic bananas, which are increasing in volume: sales of so-called “sustainable” bananas, including Fairtrade and organic bananas, etc., increased by nearly 63% in 2008 and 2009, to 3 480 565 t in 2009 against 2 133 653 t in 2004, representing more than 20% of global exports in 2009 .
However, studies show that the financial costs of these certifications often fall on the producer which tends to eliminate, de facto, smallholders from the process . Organic bananas coming onto the European market require a certificate that is sometimes long and costly to obtain. . Countries like Uganda, for example, are working on developing national standards which would be accredited by local groups in order to reduce costs.
In the last few years, the banana has also been regarded as public property, with the determination at an international level to adopt good practices in production and trade. As such in 2009 the FAO launched the World Banana Forum (WBF) whose activity focused on three main areas, mirroring the current concerns of the industry: the environment; good practices linked to sustainable production; pilot projects on “decent work” in Latin America and Africa and the distribution of costs throughout the industry; creating a bank of social and labour data.
Finally, the local and regional markets in ACP countries, particularly in Africa, are also regarded as markets of tomorrow, especially following the negotiation of Economic Partnership Agreements (EPA) with the EU. Significant population growth, urbanisation and the development of regional markets are all potentialities against a European market which is ever more competitive and difficult to penetrate . And these regional markets are developing: thus, imports of bananas from Rwanda originating from Burundi, DR of Congo, Tanzania and Uganda increased from 3 793 t to 13 114 t between 1999 and 2001 . The development of the West African market is also one of the objectives of the industry in the Ivory Coast.

REFERENCES

(1)   CTB Trade for Développent, La banane, un fruit en sursis, Bruxelles, janvier 2011
(2)   FAO, Intergovernmental group on bananas and tropical fruits, Current situation and short-term outlook, Fifth session, Yaoundé, Cameroun 3-5 mai 2011,     CCP :BA/TF11/Inf.4
(3)   CTB, op.cit.
(4)   CIRAD, Banane et plantain, pls see CIRAD website. 
(5)   2008 figures, CTB, op.cit.
(6)   FAO, Comité des Produits, Réunion conjointe de la quatrième session du sous-groupe sur la banane et de la cinquième session du sous-groupe sur les fruits tropicaux, Principales maladies du bananier et du bananier plantain : le point sur leur propagation, leur impact et les stratégies de lutte, Rome 9-11 décembre 2009, CCP :BA/TF09/7.
(7)   FAO, Comité des Produits, Réunion conjointe de la quatrième session du sous-groupe sur la banane et de la cinquième session du sous-groupe sur les fruits tropicaux, Principales maladies du bananier et du bananier plantain : le point sur leur propagation, leur impact et les stratégies de lutte, Rome 9-11 décembre 2009, CCP :BA/TF09/7.
(8)   CIRAD, 01/12/2010, pls see CIRAD website.
(9)   FAO,  Rapport de la cinquième session du groupe intergouvernemental sur les bananes et fruits tropicaux, Yaoundé, Cameroun, 3-5 mai 2001, CCP :BA/TF11/6
(10)  CTB, op.cit
(11)  FAO, Réunion conjointe de la quatrième session du sous-groupe sur la banane et de la cinquième session du sous-groupe sur les fruits tropicaux, Impact de la récession économique mondiale sur les marchés mondiaux de la banane et des fruits tropicaux, Rome, 9-11 décembre 2009.
(12)  Entretien OCAB  Parlement Européen, communiqué de presse du 3 avril 2010, Assemblée ACP-UE : soutien aux producteurs de bananes et renfort des sanctions contre Madagascar,
(13)  Entretien Philippe Mavel, OCAB
  FAO, Joint meeting of the fourth session of the sub-group on bananas and the fifth session of the sub-group on tropical fruits, Review of the world market situation for bananas and tropical fruits, Rome, 9-11 décembre 2009.
  Déclaration de Eduardo Ledesma, directeur de AEBE au Latin America Investment Summit le  6 mai  à Guayaquil, Equateur
  FAO, Banane Statistiques 2011, CCP :BA/TF11/CRS1
  http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:141:0003:0005:EN:PDF
  http://ec.europa.eu/luxembourg/docs/press/2010/47-2010_bananes_fr_ip287.pdf
  Entretien Anatole Ebanda Alima, Assobacam.
  Denis Loeillet, Banane, Rapport Cyclope 2011.
  FAO,  Rapport de la cinquième session du groupe intergouvernemental sur les bananes et fruits tropicaux, Yaoundé, Cameroun, 3-5 mai 2001, CCP :BA/TF11/6
  FAO, Comité des produits, 68ème session, Rapport de la réunion conjointe de la quatrième session du sous-groupe sur la banane et de la cinquième session du sous-groupe sur les fruits tropicaux, Rome 14-16 juin 2010
  FAO, Directives pratiques sur l’exportation de bananes et fruits tropicaux en Chine, Yaoundé, Cameroun 3-5 mai 2011, CCP :BA/TF11/4
  http://www.fastinternational.org/fr/node/1327
  FAO, Intergovernmental Group on Bananas and tropical
  FAO, Intergovernmental Group on Bananas and tropical fruits,  Institutional arrangements and structure of the banana tropical fruit markets in producing countries and their impact on income levels of smallholders-Colombia, Yaoundé, Cameroun, 3-5 mai 2011
  FAO, Intergovernmental Group on bananas and tropical fruits, 5th session,, Economic significance of banana varieties other than Cavendish- Uganda case study, Yaoundé, Cameroon, 3-5 mai 2011.
  Entretien Philippe Mavel, OCAB
  FAO, Intergovernmental Group on bananas and tropical fruits, 5th session,, Economic significance of banana varieties other than Cavendish- Uganda case study, Yaoundé, Cameroon, 3-5 mai 2011.

 ELECTRONIC LINKS

CIRAD  - http://www.cirad.fr/nos-recherches/productions-tropicales/banane-et-plantain/contexte-et-enjeux


Last updated on 5/9/2012