Exports from Panama have been worst hit by falling prices, down 22% on average

Wholesale banana prices are this month struggling to recover from an oversupply-fuelled slump that has seen them fall 13.8% compared to the same time last year.

Average prices of imports to the UK are down 11p/kg on the equivalent week to 21 January during the past two years, from 80p/kg in both 2017 and 2018 to 69p/kg this year [Defra].

Exports from Panama have been worst hit by falling prices, down 22% on average (16p/kg) to 64p/kg. Belizean prices were this month’s lowest at 58p/kg, though comparison data from previous years was unavailable.

The average price for the whole of 2018 was 78p/kg [Mintec]. Prices began to fall at the end of last year, hitting lows of 62p/kg in mid-December as continuous high volumes began to flood the market, says Mintec analyst Rutika Ghodekar.

The glut followed a good growing season throughout key Central American banana growing regions and the Caribbean, she adds.

Banana Link International co-ordinator Alistair Smith says the banana industry in South and Latin American “is structured towards oversupplying the EU market while operating at near maximum capacity”.

This strategy, along with a lack of climatic disruptions, had kept prices low, he adds.

Meanwhile, the world’s biggest banana exporter, Ecuador, is predicted to surpass its own export record during the 2018/19 season. Preliminary figures suggest it will ship in the region of 6.1 million tonnes of bananas, a 5% increase on last year.

However, these changes are currently not reflected in British supermarket prices, which remain at an average of £1.14 per bunch, unchanged from the same period last year [Edge w/e 21 January 2019]. “Major retailers each deal in annualised contracts at fixed prices so do not reflect spot market fluctuations,” says Smith.