The end of the 20-year banana “trade war” between the EU and Latin America last week has sparked suggestions banana prices will fall - but suppliers are warning that UK prices are unlikely to come down.
The EU and 11 Latin American countries last week signed an historic agreement to end their long-running dispute over import tariffs.
Latin American producers had argued they were being treated unfairly by Europe because they had to pay a €176/t import duty to sell bananas into the EU, whereas their rivals from Africa and the Caribbean did not. As part of the agreement, the import duty on Latin American producers will now be reduced to €114/t over the next seven years.
The news prompted suggestions banana prices could fall by as much as 11%. However, Fyffes - a major supplier to the UK mults - said this was unlikely and pointed out last week’s deal had been in the pipeline for the past three years. “This was just the sign-off on an agreement implemented in 2009, so Fyffes don’t expect any impact on volume or price,” a spokesman said.
This was echoed by Banana Link, which campaigns for banana workers’ rights. The tariff reduction agreed in 2009 as part of the Geneva Banana agreement was already built into most retailer pricing deals, a spokeswoman said.
Bananas are the focus of intense pricing competition in the UK. Retail prices have stayed stable at 68p/kg for the past year, even though wholesale prices have risen 16.4% year-on-year [Mintec].