Companies that supply bananas have encountered numerous supply and transportation difficulties this year, stemming from weather and political issues in various growing regions.
Bil Goldfield, director of corporate communications for Westlake Village, Calif.-based Dole, characterized 2018 as a “very interesting and challenging year.”
He mentioned political issues in Honduras and Colombia; low temperatures in Guatemala and Costa Rica; strong rains in Central America that have affected vessel schedules; cloudiness in Ecuador; and dry conditions in Colombia as factors that have played a role.
“There have been several volume disruptions during the year as a result,” Goldfield said. “Currently, volume in Ecuador is still lower than normal, but Central American sources overall are improving.”
Carlos Lopez Flores, president of Fort Lauderdale, Fla.-based Chiquita, also noted numerous issues and said banana production worldwide has been lower as a result.
“The bananas consumed in North America are sourced mainly from Central America, where challenges the industry faced this year were predominantly weather-related,” Flores said.
“The year kicked off with colder weather than normal, and in Costa Rica and Panama it rained above average, creating port service disruption. The unstable political situation in the region continues to pose a challenge for a consistent and problem-free supply.
“In other regions such as Asia, the drivers impacting the decline were due to phytosanitary and overall development issues that are affecting the overall banana production,” Flores said.
Dennis Christou, vice president of marketing for Coral Gables, Fla.-based Del Monte Fresh Produce, said that in recent months growing conditions have been good.
He expected availability to remain steady through the rest of the year despite some transportation hiccups in September.
“Just recently, the strike in Costa Rica has disrupted some of our logistics,” Christou said. “Due to our diversified sourcing the impact was contained to only minimal disruptions. In addition, the new trucks rules and regulation/transportation issue have been tough to deal with.”
Jessica Jones-Hughes, vice president of West Bridgewater, Mass.-based Oke USA, the importing arm of Equal Exchange, said weather has been ideal in Peru and Ecuador this year.
“2017 was a hard year for quality due to El Niño and excessive rains that led to wide-scale flooding, especially in Peru,” Jones-Hughes said. “In 2018, there has been less rain in general, rains coming at the right time and more optimal growing conditions in general.
“As a result Equal Exchange has see more than a 50% decrease in quality issues year over year,” Jones-Hughes said.
She also noted logistical issues and the September political activity in Costa Rica.
“The main disruptions in supply in 2018 and particularly over the last few weeks has been a result of steamship line delays and issues,” Jones-Hughes said.
“Shipping lines continue to have major delays along the most commonly used routes from South America to the U.S. This has caused inconsistencies in steamship line arrival timing to the U.S. and disruptions in banana supply across the board.
“The current strikes in Costa Rica have furthered the inconsistencies on the steamship end as any routes that call on Costa Rica have experienced major delays in calling the CR ports,” Jones-Hughes said.
“The steamship lines that Equal Exchange works with have all experienced delays due to the strikes and hurricane that hit the southeastern coast in September.”
Equal Exchange, which offers products certified by Fairtrade America, mentioned price as a factor as input costs increase.
“Many of the farmer co-ops that Equal Exchange works with have commented on the rising costs of boxes, transport and ports in country putting pressure on the already slim banana margins,” Jones-Hughes said.
“Fairtrade International is working on a new minimum price for 2019 and has been surveying producers, importers, etc., on this matter, but the minimum price is not typically reflective of the small farmer economics, making it challenging for small farmers to compete, even in fair trade ...
“The increasing costs of boxes, shipping, ports, etc., is not currently being reflected in the price of bananas,” Jones-Hughes said.
“It will be interesting to see who will bear these extra costs in the conventional banana market and at what point they will trickle down to the retail level, or if margins across the board will continue to shrink.”
Mayra Velazquez de León, president and CEO of San Diego, Calif.-based Organics Unlimited, also mentioned price pressure as a factor, noting that there is a lack of understanding on what is figured into the higher prices needed for organic product versus conventional.
Chiquita also referenced the rising costs of inputs, including for paper, bunker fuel and inland transportation.
“Stricter regulations, fuel prices going up and labor availability have negatively impacted costs,” Flores said.