Most significant price drop for bananas in ten years

While everything is getting more expensive, bananas are getting more inexpensive. Seven Latin American countries are calling for a fair price for the fruit, which has never been more popular or cheap.

More but cheaper than ever

Last month, the governments of seven Latin American countries launched a call for European and American markets to pay a fair price for bananas. 2020 was a record year for banana exports: the food and agriculture organisation of the United Nations (FAO) calculated that more than 22.2 million tonnes of bananas were shipped globally. The demand peaked because of the coronavirus pandemic.

However, prices are not following the trend. On the contrary: according to the French research centre Cirad, the price for bananas last year dropped the most in ten years, reports Belgian newspaper De Standaard. In Belgium, GfK measured an average price decrease of 6 per cent between 2016 and 2021. The kilo price thus came to the same level as in 2012: barely 1.45 euro per kilo.

Direct negotiations

Prices are primarily determined in direct negotiations between retailers and farmers, although a large part (one third) is also traded at fluctuating weekly prices on the spot market. The supermarket chains thus have a significant amount of power in setting prices, resulting in ever-decreasing prices.

This leads to reduced income for the farmers, who go to the extreme to maximise their harvest. This comes at the expense of biodiversity because farmers exhaust their soil and crops and use lots of pesticides and fertilisers.

Belgian trade organisation Comeos advocates voluntary efforts to provide fair prices for banana producers. However, competition law does not allow fixed agreements to make supermarkets pay more, they say.