Each year, Fruit Logistica is the international event of fruits and vegetables industries, bringing together producers, international companies and associations. The event connect together more than 3,100 exhibitors from 84 different countries across the value chain, and more than 75,000 visitors. Among the exhibitors, there were the big names of the banana industry (Del Monte, Chiquita, Compagnie Fruitière …), several stands from African countries enhancing local productions of each.
For Afruibana, this event was an opportunity to meet the different actors of the fruit sector, to discuss the situation of the banana market and to meet other European and African producers association. Especially since the year 2018 will be crucial for banana after a year 2017 already marked by a significant fall in prices despite the dynamics of consumption, especially in Europe.
During the event, we had the opportunity to meet Denis Loeillet, expert on the banana market at CIRAD. The Fruitrop magazine of the research laboratory is dedicating this month an important report on the banana with the evocative title: “Is the party over? “. In his editorial, Denis Loeillet summarizes the situation as follows: ” So, the economic storm predicted a year ago in these columns has come to pass, and could even become a cyclone in 2018. The equation is uncommonly simple, with no unknowns: there are too many bananas on the international market, and the European Union is in the firing line”.
Since 2012, the European market has absorbed a million more bananas, thus constituting today a market of 6.3 million tons of bananas. Despite this dynamic, mainly from Eastern Europe, this is not enough to absorb the surplus of supply on the banana market. Many see contracting as the best way to limit damage, as its generalization shows that most players see market saturation as a long-term phenomenon.
Like many agricultural commodities markets, bananas are not immune to a natural disaster (both climatic and sanitary) that could rebalance supply and demand. Nevertheless, despite a real dynamic of consumption, the rise in production remains for the moment much higher and a reversal of the market is hardly possible in the short or medium term. This is why the European Union is expected to act on this issue as a regulator, in order to prevent African and European producers from finding themselves in a situation of unbearable price war against producers in Latin America.