South American banana exporters urge foreign supermarkets to help mitigate “spiraling inflationary prices”

25 Oct 2021 --- Banana producers in South America are urging international retailers to address the global issue of “spiralling inflationary prices” affecting production costs, which they argue are not being reflected in the final purchase price paid by large supermarkets of the EU, US and the UK.

In a call for a review of prices, banana producers in Ecuador point out particular difficulties with German discounter, Aldi.

“However, the supermarkets, led by the German supermarket Aldi, are unwilling to compensate for this increase in costs, something that seriously harms banana producers and exporters who are forced to bear the full cost increase,” states Clúster Bananero del Ecuador, the export association heading the South American coalition of banana producers.

“With the excuse of offering the ‘cheapest bananas on the market,’ the German giant is setting the price by which the rest of the supermarkets will be guided and none of them will be willing to pay more.”

The producers are asserting the “lack of fair compensation and a true shared responsibility” on the part of the North American and European grocery chains, stressing that all the supplies needed to ensure that bananas reach the shelves of consumers in these regions have become more expensive.

FoodIngredientsFirst has reached out to Aldi for further comment.

Knock-on effects impact smaller players
This month, producers began their negotiations with supermarket chains seeking to buy the bananas to sell on their shelves in 2022.

The underlying pricing issues were flagged ahead of the upcoming XVIII International Banana Convention 2021, to be held from October 27 to 29 in the city of Guayaquil, Ecuador. 

Representatives of the banana sector attending the event are speaking on behalf of producers in Ecuador, Colombia, Guatemala, Honduras, the Dominican Republic and Costa Rica.

“Latin American banana farmers receive derisory offers per box of bananas, which have not risen in price for more than two decades unlike other fruits, because supermarkets like Aldi take advantage of the intrinsic nature of the sector,” asserts Clúster Bananero del Ecuador.

“A sector of small and medium-sized producers, of family economies and of crucial importance for rural communities in Latin American countries that accept the harsh conditions because they cannot negotiate,” he continues.

“This type of business, which has been adapting to changing and increasingly demanding environmental legislation for years, now sees its efforts undervalued.”

A call for shared responsibility
Stakeholders across the Latin American banana export sector are calling for shared responsibility between all actors in the supply chain – from the producer to the final consumer via supermarkets and other intermediaries – which they stress will become a “first and efficient mechanism to ensure the sustainability of the global banana industry.”

The coalition highlights that supermarkets of the EU, US and UK are the main buyers of bananas worldwide, and consumers in these countries consume more bananas than any other fruit, despite the fact that they are produced outside their territories.

The tropical crop is not only valued as a whole fruit but is also the base of key ingredients such as fruit extracts and sweeteners. 

Adding to the growing list of concerns, isolates of the Black Sigatoka fungus, a “devastating” banana crop disease, were identified from seven banana-producing countries in Latin America, the Caribbean, Asia and Africa for the first time on a large scale, earlier this year. 

“For producers, the fact that Aldi still wants to offer cheap bananas to European consumers is unsustainable in the short term,” argues Clúster Bananero del Ecuador.

“It is not possible to offer a product with high quality standards at a price that has not changed in two decades with rising production costs. Shared responsibility seeks to find solutions to this problem and for all actors to contribute to the survival of the sector, since the sacrifices cannot come from one party alone.”

By Benjamin Ferrer