Stronger Banana Market Likely into 2013

Strong Banana Market in 2013

After a spring of supply disruptions and a surprisingly strong summer, banana industry sources report a stable fall market that should strengthen at least through early 2013.

“The crop is good with good quality and growing conditions,” said Dennis Christou, vice president marketing for Coral Gables-based Del Monte Fresh Produce.

Bil Goldfield, communications manager for Westlake Village, Calif.-based Dole Fresh Fruit, said he expects supplies to remain consistent until the end of the year.

Rob Adams, business manager for banana and specialties for Charlotte, N.C.-based Chiquita Brands International Inc., said volumes in Central America have been steady and fairly consistent with the time of year, but growing areas in Colombia and Ecuador have been unusually wet and cloudy, putting pressure on exportable volumes.

“Given the low volumes out of South America, global supply is relatively tight for this time of year, and demand in North America is very strong,” Adams said.

Prices began rising in September, he said, and should continue to move upward as winter approaches.

Cold weather has also affected volumes for Coral Gables-based Banacol Corp.

“Since the beginning of the year, production has been down a little bit for us in both Colombia and Costa Rica,” said Bill Sheridan, executive vice president of sales.

“We’re expecting things to be very short industrywide in the first half of next year,” he said.

On the bright side, Sheridan said prices remain stable and strong sales through the summer represent a big change from the past, when banana sales typically slowed down after Memorial Day.

“This was the best September I’ve seen in years,” he said, “with a lot fewer back-to-school ads than we’ve ever seen.”

The strong market demonstrates that bananas are on everyone’s list, he said, and that retailers have done “a tremendous job” displaying fruit at the right color.

“People ask when bananas are going to be a loss leader again,” Sheridan said. “I don’t think we need to do that, and it really doesn’t help the category.”

Scott DiMartini, Philadelphia-based regional sales manager for Turbana Corp., Coral Gables, also reported a stronger than usual July and August.

Even San Diego-based Organics Unlimited, which sells organic bananas from Mexico, experienced steady sales over the summer.

“It’s been a different year, with more people buying bananas during the summer without a decrease in prices,” said president Mayra Velazquez de Leon.

Several companies report strong demand for organic, fair trade and specialty bananas such as baby and red bananas.

Demand for organics continues to increase and in some cases is outpacing supply, Adams said.

-Written by Cynthia David of The Packer

Source: The Packer

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