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Ukraine and Russia consume 2 million boxes of bananas every week. If the war lasts, these boxes will have to be diverted to western Europe and risk driving down prices.
The market is just shuddering at the moment, but “ the worst-case scenario is yet to come for Denis Loeillet, researcher in economics, specialist in the banana market at the Center for International Cooperation in Agricultural Research for Development (CIRAD).
In question: the surplus of bananas that looms on the horizon on the European market. Together, Ukraine and Russia consume regarding two million boxes each week, mostly shipped from Latin America. So there are currently several shipments of bananas floating on the road, heading for Eastern Europe, St. Petersburg and until last week, Odessa.
First shipments diverted
Following the closure of Ukrainian ports, ships were redirected to Constantza in Romania and Istanbul in Turkey. But the next shipments to Russia might also be diverted following a default in payment or because of maritime insurance that has become too expensive. And if they do not find new outlets, these bananas not consumed in the East will weigh directly on the West European market.
The offer is indeed linked to the market. Banana trees cannot adapt to a sudden drop in demand, so they will continue to produce. At the rate of two million boxes per week, within a month, there will inevitably be a surplus that is difficult to dispose of. A part will perhaps be destroyed on the spot, the other will inevitably be sold off.
European banana growers worried
Panicked, Romanian operators began to lower their purchase price at the end of last week, before changing their minds. For the moment the courses are maintained, but ” the banana market should not last long predicts the CIRAD expert.
Notably because the banana market is a very reactive market. A few hundred thousand tonnes of surpluses are enough to bring down a European market estimated at six and a half million tonnes.
The situation is of particular concern to European banana producers (APEB) – Martinique, Guadeloupe, Canary Islands and Madeira – who fear that this announced drop in prices will further weaken their sector.
