EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT Directorate C. Economics of agricultural markets (and CMO) C.2. Olive oil, Horticultural products Brussels, FR/cg D(2009) Bananas - Market report 1. Summary In overall banana imports into the E.U. increased by 3.7 %: MFN imports rose by 2.3% and ACP imports grew by 9.7 %, respectively, in comparison with. Wholesale prices for all the origins (MFN, EC and ACP) have been higher than in (+4%, +5.8% and +4.3%, respectively).therefore, they had reached levels very close to those of, when they set records historical high. Aldi's price, which is considered the benchmark price by the industry, has been higher than in, with an increase of 6.7% : however, in this price has been at much more stable level compared to previous years, in the period as a whole. This shows that after three years of the banana tariff only regime the E.U. banana market has stabilized. On 19 and 24 February Chiquita International and Fresh Del Monte, two of the leading global producers and distributors in the banana business 1, reported financial and operating results for the fourth quarter and the whole year of. In, both companies have reported positive financial results in the banana sector: Chiquita operating income was $ 184.2 million (compared to $ 111.9 million in, increasing by 64.6%); Del Monte gross profit was $ 117.7 million (compared to$ 61 million in, growing by 93%). This was mostly due to relatively high fruit prices in the North America and European market and a strong Euro. On 7 January, Fyffes has announced for an adjusted Earning Before Interest and Tax in the order of 15 million, compared to 18.4 million in. 1 Dole Food Company and Noboa group, the other two leading global producers and distributors of bananas, do not report because they are privately owned. Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11. Office: L130 7/81. Telephone: direct line (32-2) 296.55.98. Fax: (32-2) 295.37.09. E-mail: felice.romano@ec.europa.eu G:\1. BANANE\2. GENERALITES\3. CONTACTS EXTERNES\Notes et fax\notes 2009_FR markt analysis..doc
2. Banana market during the fourth quarter of. In the fourth quarter of, overall volumes of bananas imported into the E.U. were 1 201 308 tonnes (see table 3), compared to 1 215 248 tonnes in the same period in, which represents a decrease of 1.1%. MFN countries exports into the E.U. declined by 6.7% in comparison with the same period of (from 1 010 228 to 942 338 tonnes), while imports from ACP countries were 26.3% higher, growing from 205 020 to 258 970 tonnes, (see table 3). During the fourth quarter of banana imports in the USA increased by 0.5% in relation to the same period in, growing from 963 786 to 968 596 tonnes. 3. Banana market during the year. 3.1. Volumes Throughout the years to, since the liberalization of the European Union banana market, E.U. imports have been trending upwards, setting a new record year after year (see chart here below). Cumulative imports MFN countries 2003-4.500.000 4.000.000 3.500.000 3.000.000 Tonnes 2.500.000 2.000.000 1.500.000 2003 1.000.000 500.000 0 January February March April May June July August September October November December Source: Eurostat In the beginning of, unseasonably cool temperatures in Central America delayed crop maturity in much of the producing countries, affecting yields and causing harvest delays. Heavy rainfall and flooding in February destroyed thousands of hectares of bananas plantations in Ecuador, the first largest banana exporter in the world. 2
In, overall volumes of bananas imported into the E.U. were 4 848 975 tonnes (see table 1), compared to 4 678 013 tonnes in, which represents an increase of 3.7%. During the year, volumes of bananas imported from the MFN countries increased by 2.3% in comparison with (from 3 840 661 to 3 930 663 tonnes), while imports from ACP countries were 9.7% higher than (from 837 353 to 918 312 tonnes), which are both MFN and ACP best ever export outcome! Reduced banana supplies in major MFN producing countries like Costa Rica, Panama, Honduras and Brazil, have affected the overall MFN quantities of fruit available. In addition, according to a report " Fruit and tree nuts outlook" from the USDA, United States Department of Agriculture, the tighter supplies drove up retail prices to American consumers, reducing demand and further contributing to the lower quantity imported, notably during the first half of the year. The positive ACP result in was mostly due to good weather conditions, notably in the last four months of the year (see chart here below). Cumulative imports ACP countries 2003-1.000.000 900.000 800.000 700.000 Tonnes 600.000 500.000 400.000 2003 300.000 200.000 100.000 0 January February March April May June July August September October November December Source: Eurostat The upward trend has concerned all the ACP origins (except Dominican Republic and Jamaica), which have all increased their banana exports, notably during the second half year of : the only exceptions, Dominican Republic and Jamaica, had a drop of banana exports of 17.3% and 99.8 %, respectively, due to weather related difficult conditions (consequences of hurricanes and tropical storms in the end of ). During the year, banana imports in the USA decreased by 0.7% compared to, from 4 003 800 to 3 976 146 tonnes, (see table 2). In, for the first time USA banana imports crossed the threshold of 4 million tonnes but in they went down this ceiling again. 3
3.2. Prices As a number of banana-producing countries experienced production setbacks due to unfavourable weather conditions, particularly during the first quarter of the year, the resulting stable supplies imported into the E.U. in has led to slightly higher prices in compared to. The extreme high prices reached during the first four months of rallied to 1.29 /Kg. in mid-march, which is the highest level since at least : this price strength occurred during a period of relatively low fruit availability in the main producing countries due to severe weather conditions. Furthermore, global banana prices have also been bolstered by a strong increase of costs of the inputs used in order to grow bananas in the producing countries, as well as from the emergence of new source of demand for this fruit from consuming countries like Russia, which is now the main destination for Ecuadorian bananas. Afterwards, in the second and third quarters wholesale prices have declined to a more average seasonally level, from the very high level of 1.29 /Kg. in mid-march to a low of 0.85 /Kg. in August, which is more in the range of the last five years for this period of the year. 3.2.1. MFN wholesale price As a consequence of these different factors, Wholesale prices of yellow MFN bananas have increased during the year, compared to the same period of, by approximately 4% (see chart here below). EUR/kg 1,40 1. Wholesale prices of yellow dollar- bananas in the EU27 3-week average in MEMBER STATES 1,20 1,00 0,80 0,60 0,40 2009 0,20 1 6 11 16 21 26 31 36 41 46 51 Week Source: Member states 3.2.2. Aldi's price Aldi's price, which is fixed weekly and is considered by the industry as a reference price on which basis others prices are determined, during the period has been much more stable than previous years. 4
Following a record high of 0.98 /Kg. in mid-march, due to a certain shortage of fruit for the reasons above mentioned, this price declined to a more seasonally level of 0.59 /Kg. during the month of August, remaining at this level for the rest of the year. Nevertheless, during the year as a whole, Aldi's price was 6.7% higher compared to (see chart here below). ALDI PRICES -2009 25,00 20,00 Euro/caisse 15,00 10,00 2009 5,00 0,00 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 week Source: CIRAD 3.2.3. EC wholesale price EC wholesale price remained significantly higher than the previous year, particularly between January and April, due to the lack of bananas from Martinique and Guadeloupe (destroyed by hurricane Dean in August ). Hence, in the end of March the EC wholesale banana price hit a peak of 1.08 /Kg., which is the highest level since. On 8 April, after almost 8 months, a first ship loaded with 4 800 tonnes of bananas from Martinique arrived in the port of Dunkirk, the first since August. During the summer period, due to a strong crop notably in Martinique, EC wholesale price hit a low of 0.77 /Kg., followed by a new surge in the fourth quarter to 1.04 /Kg., a new peak for this period of the year. EC wholesale has been extremely instable in, with changes upwards and downwards of a magnitude never reached before, due to a marked high volatility in the offer of the fruit for the whole period. Wholesale prices of yellow EC bananas during have been 5.8% higher compared to (see chart here below). 5
EUR/kg 1,40 3. Wholesale prices of yellow EC- bananas in the EU27 3-week average in MEMBER STATES 1,20 1,00 0,80 0,60 0,40 2009 0,20 1 6 11 16 21 26 31 36 41 46 51 Week Source: member State 3.2.4. ACP wholesale price During the year ACP wholesale yellow bananas prices were 4.3% higher compared to the same period of, notably due to very high prices in the first quarter of the year, because of a relatively short supply of both MFN and ACP bananas (see chart here below). 1,40 EUR/kg 2. Wholesale prices of yellow ACP- bananas in the EU27 3-week average in MEMBER STATES 1,20 1,00 0,80 0,60 0,40 2009 0,20 1 6 11 16 21 26 31 36 41 46 51 Week Source: member States The major part of the ACP price increase occurred in the period from mid-february to mid- April, with a record of 1.21 /Kg. in the end of February, which represent the highest level since. Afterwards, from mid-april onwards prices have declined to a point closer to the average for the period, stabilizing in the second half of the year, in a range between 0.80 /Kg. to 0.90 /Kg, which is normal for this time of the year. 6
4. Chiquita earning conference call, 19 February 2009. Chiquita reported that in banana segment operating income grew by 64.6% compared to the same period of last year (from $ 111.9 million in to $ 184.2 million in ). This was primarily due to: Higher banana pricing, notably in Europe and North America market, Favourable Euro/dollar exchange rate, Overall supply and demand balance from MFN sources which was relatively tight. These benefits were partially offset during the period by higher banana production and logistic costs as well as higher industry costs for purchased fruit. Chiquita's bananas worldwide net sales in increased by 12.4% up to $ 2 060 million, compared to $ 1 833 million in. Mr. Aguirre, Chairman and Chief Executive Officer of Chiquita International declared: "In our European banana business, we benefited from a stronger Euro, local prices and volumes decreased only modestly, as we continued our strategy to maintain our premium position and focus more on profit than on market share". During the year Chiquita has reported that its average banana price grew by 5% on a local currency basis on the European market 2 (although they rose by 14% in US $ basis). Volume of bananas sold on the European market 3 was 8% lower than. On the North American market, Chiquita prices and volume were, respectively, 30% and 1% higher on that market in relation to. 5. Fresh Del Monte earning conference call, 24 February 2009. Three years after the new European banana import regime has become effective, the past period appears to have been very positive to Fresh Del Monte, which has announced strong results. Fresh Del Monte has reported that in gross profit for the banana segment was $ 117.7 million compared to $ 61 million for the same period last year, which represent an increase of 93%. Sales of bananas in were $ 1 420 million, compared to $ 1 199 million in the previous year (+ 18.4%). 2 EU-25 plus Switzerland, Norway and Iceland. 3 EU-25 plus Switzerland, Norway and Iceland. 7
6. Fyffes, Stock Exchange Announcement, 7 January 2009. Irish fruit distributor Fyffes announced to the Stock Exchange on 7 January 2009 that the Group expects to deliver an adjusted EBIT (Earning Before Interest and tax) in the order of 15 million for, while in it was 18.4 million, which could represent a reduction of 18.5%. There has been a significant adverse movement in exchange rates in the end of as a result of the strengthening of the US Dollar, particularly relative to Sterling. The Group expects further cost inflation in 2009 with higher fruit and shipping costs only partly offset by lower fuel costs. Fyffes is seeking significant increases in selling prices in all key markets. 7. MFN imports 7.1. Ecuador Ecuador is by far the largest exporter of bananas in the world and E.U. major supplier. On the contrary, on USA market Ecuador is only the third major supply after Guatemala and Costa Rica. Heavy rainfall and flooding in February destroyed thousands of hectares of bananas in Ecuador with negative effects on their global banana exports, notably during the first quarter of the year. Notwithstanding Ecuador experienced a production reduction, due to this unfavourable weather, the excellent result of the second part of the year has more than offset a negative outcome. According to the Ecuadorean Central Bank, during the year banana exports worldwide have increased by 1.5% in comparison with, from to 5 057 073 to 5 132 784 tonnes, following the good results of when for the first time the ceiling of 5 million tonnes was reached. Exports to the EU have been a remarkable 12.2% higher than during : from 1 183 466 tonnes to 1 328 033 tonnes, which is the best result ever for Ecuador (see table1). This excellent result was mostly due to the increasing volumes of bananas exported during the period between April and October, when Ecuador banana exports to the E.U. where at their highest level ever for seven consecutive months (see chart here below). 8
Imports from Ecuador 160.000 120.000 Tonnes 80.000 40.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January - December Source/ Eurostat During the same period, Ecuador exports to the USA have declined by 10.6%, decreasing from 929 175 tonnes in to 830 268 tonnes in (see table2). This means that Ecuador, which in was USA major banana supplier, in and it has only been the third main supplier there, after Guatemala and Costa Rica. According to local press in USA, in some large store appeared during the first quarter the following warning: "Due to severe storms causing major flooding in Ecuador, the availability of bananas has been drastically cut. We are pursuing every resource possible and hope to have this inconvenience controlled as soon as possible". In and, Russia has become Ecuador major market, overtaking USA and Italy. According to the Ecuadorean Central Bank, since Ecuadorian overall banana exports worldwide grew in quantity terms by 10.3%, increasing from 4 653 878 tonnes in to 5 132 784 tonnes in. More remarkable, according to the same source, during the same period the value of Ecuadorian bananas worldwide grew by 51.7%, increasing from US $ 1 041 million to US $ 1 578 million, due to a strong increase of producing prices. 7.1.1. Prices On 8 April the new banana referential price was fixed at $ 4.80 per box by the Minister of Agriculture in Ecuador, following the previous increase on 31 July when it went up from $ 3.25 to $ 3.75 per box: this represents an outstanding increase of 45% in less than one year. 9
Furthermore, the Government of Ecuador from 1 st January 2009 has increased the minimum price for the box of bananas from US $ 4.75 to US $ 5.10. 7.2. Costa Rica Unseasonably cool temperatures in Costa Rica in the beginning of the year and flooding in November have badly affected the banana production in this country in. According to local press, weather phenomenon "la Niña" created losses of $ 26 million for the banana exporters of the Costa Rican Caribbean plantations in the first four months of the year, due to a considerable increase in rainfall. During the period exports of bananas were 12% lower than expected, according to Corbana, the National Banana Organisation. Furthermore, due to heavy rains in November, Costa Rica banana production had been further hit, with around 12 000 hectares affected and a loss of around 100 000 tonnes. Heavily geared towards the export market, the smaller banana crop in in Costa Rica curtailed export availability, providing so more opportunities for countries like Ecuador and Colombia which stepped in to fill the supply gap, especially in both countries' top export market, the European Union. Although domestic production of bananas decreased from the prior year, according to Procomer, the Costa Rican export promotion organisation, year on year in the value of banana exports increased worldwide by 1.8%. It is worthwhile to remind that during the years and the value of bananas exports had already increased by 11% and 28 %, respectively, compared to previous years. According to preliminary figures from the banana industry, reported by the press, the Costa Rica banana exports worldwide have decreased by approximately 10% in volume terms in compared to, declining from 2 060 000 tonnes to 1 880 000 tonnes. The decline of exports to the EU in has been of 8%, from 970 669 tonnes in compared to 893 395 tonnes in (see table 1). Notwithstanding these major shortage of fruit, Costa Rica banana exports into the E.U. were at their highest level ever for four months in, in March, April, May and September, when more banana were available (see chart here below). 10
Imports from Costa Rica 120.000 90.000 Tonnes 60.000 30.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January - December Source: Eurostat In the same period, bananas exported from Costa Rica to USA were 874 424 tonnes, compared to 1 036 897 tonnes in (-15.7%), (see table 2). Nevertheless, in Costa Rica has kept on the USA the place of the second major supplier after Guatemala, after having overtaken Ecuador in : as major supplier, Ecuador in USA has fallen in and from the first to the third place. Costa Rican government from 1 st January increased the minimum price for the banana box paid by traders to the independent producers from US $ 5.85 to US $ 6.45. Moreover, since 1 st January 2009 Costa Rica Government has established that this price is US $ 7.59, instead of US $ 6.45, which represents an outstanding increase of 29.7% in one year. 7.3. Colombia Banana exports in Colombia in were still in an upward trend at their highest level ever. During the year, the increase of banana exports from Colombia into the EU has reached a record high volume of 1 278 133 tonnes, compared to 1 153 912 tonnes in, which is an excellent increase of 10.8% (see table 1). Colombia is the country which has most profited of the increased banana market access on the E.U. market After the recover following a major shortage of bananas during the first quarter of, due to heavy rains in the banana plantations, Colombia banana exports to the E.U. have hit a nine consecutive months of best ever exports, from April to December (see chart here below). 11
Imports from Colombia 140.000 105.000 Tonnes 70.000 35.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January - December Source: Eurostat Furthermore, for the first time ever in Colombia has been E.U. major supplier in seven months of the year (May, June, July, September, October, November and December), overtaking Ecuador which has become second major supplier in these months. In the same period, bananas exported from Colombia to USA were 450 757 tonnes, compared to 377 232 tonnes in, which represents a remarkable increase of 19.5% (see table 2). The Colombian government decided on 29 February to support the export sectors of bananas and flowers with about US $ 83 million, of which US $ 26 million for the banana sector, due to the strong revaluation of the local currency, the Peso. The Minister of Agriculture, Mr. Arias Leiva, insisted that the situation was untenable and asked the Central Bank to reduce interest rates. He added:" for each 100 pesos that the local currency appreciated, exporters lost 315 billion pesos". In Colombia, FOB prices of bananas have increased by 11.4 % during the first 11 months of compared to the same period of, from US $323 to US $ 360 per tonne, notwithstanding the producers' difficult economic situation due to the re-evaluation of the Colombian peso against the US dollar. 7.4. Panama Banana production is still going through a difficult time in Panama, and was the latest evidence. According to preliminary figures from the Directorate of bananas of the Ministry of Development in Agriculture, reported by local press, the Panamanian banana exports have decreased worldwide by 16% in volume in compared to, declining from 406 118 tonnes to 341 032 tonnes. 12
Due to higher prices, the declining of the value of bananas exported in by Panama worldwide was 11.8%, decreasing from US $111.9 million in to US $ 98.7 million in. Panama banana exports into the EU in have decreased by 16.8%, declining from 353 991 tonnes in to 294 588 tonnes in (see table 1), due notably to local major social problems in the Cooperative of Multiple Services of Puerto Armuelles (Coosemupar), the main independent banana producer in Panama. Hence, banana imports from Panama have been at their low level since (see chart here below). Imports from Panama 50.000 40.000 Tonnes 30.000 20.000 10.000 1 2 3 4 5 6 7 8 9 10 11 12 January - December Source: Eurostat The future of the Cooperative of Multiple Services of Puerto Armuelles (Coosemupar), the main independent banana producer in Panama, is extremely uncertain. Panama farmers reached a deal with Chiquita after a protracted dispute that ensured banana supply to Chiquita until March. The agriculture ministry said on 5 December that Panama's main banana producing cooperative, Coosemupar, had agreed to sell Chiquita a box of bananas for $ 6.50, a one dollar increase on the precedent contract. Therefore, in March banana company Chiquita abandoned its monopolistic contract for marketing fruit from Coosemupar, six years ahead of schedule. As from first March, Chiquita bought any fruit it needs from Coosemupar, and the rest can be sold by the cooperative on the international market in the Baisa "Bolsa Nacional de Productos" ( Stock Exchange of Products) to any interested party, replacing the 2003 agreement which gave Chiquita exclusive rights to all the fruit. Nevertheless, on September 14 the Minister of Agriculture Development, Guillermo Salazar, announced that Coosemupar has lost 90% of its banana production due to Black 13
Sigatoga. It seems that the plague was the result of a lack of adequate control and preventive measures and the use of inappropriate fumigating cycles. Panama banana exports into the USA during the same period grew by 1503% compared to, from 502 tonnes to 8 046 tonnes (due to the very small amounts concerned) (see table 2). 7.5. Honduras and Nicaragua According to the Honduras Central Bank, in banana exports worldwide increased by 2% compared to, from 539 143 to 549 671 tonnes. Honduras banana exports into the EU decreased during the period by 21.2%, from 30 390 tonnes in to 23 954 tonnes in (see table 1). Honduras banana exports into the USA during had increased by 4.4% compared to, from 482 732 tonnes to 503 810 tonnes (see table 2). It appears that Nicaragua, which did not export bananas to the EU since 2003, has exported 7 tonnes in. 7.6. New players in the E.U. banana market: Brazil, Guatemala and Peru 7.6.1. Guatemala According to the Guatemala Central Bank, during the year banana exports have increased by 1.8% worldwide in comparison with, from 1 330 363 tonnes to 1 354 715 tonnes in, of which 88% were exported to USA. During the same period, Guatemala exports to the USA increased by 8.7%, from 1 093 391 tonnes in to 1 188 724 tonnes in, being by far the first banana major supplier on the USA market (see table 2). The market share of Guatemala on USA market in was 30%, compared to 22% for Costa Rica and 21% for Ecuador. In value terms, Guatemala worldwide banana exports in were US $337 million, compared to US $299 million the previous year, growing by 13%, due notably to higher prices. Guatemala banana exports to the E.U. in have decreased by 23.6% compared to, from 18 703 tonnes to 14 275 tonnes (see table 1). 7.6.2. Brazil and Peru During the year Brazil and Peru shipments of bananas into the EU have had different trends, compared to : Peru exports grew by 14.7%, while Brazil exports decreased by 32.3% (see table 1). 14
According to the press, in April in Brazil occurred extensive flood damages in Rio Grande do Norte region, which destroyed most of Del Monte fruit produced there and exported into the E.U. It seems that due to these heavy rains, Del Monte lost approximately 50% of its production, which were estimated about 80 000 tonnes for the whole. The loss in value amounted at about US $ 10 million. Peru exports of bananas to the USA increased by 26% during this period, while Brazil did not export bananas to the USA (see table 2). 8. ACP imports Most of ACP origins were affected in the first half of by the consequences of the hurricanes and storms which hit the Caribbean countries in the second part of, destroying an important share of their banana plantations, notably in Dominican Republic, Jamaica and Windward Islands. During the year overall exports of ACP bananas into the E.U. grew by 9.7% compared to the same period, increasing from 837 353 to 918 312 tonnes (see table 1). Compared to the same period of the previous year, ACP countries shipments of bananas into the EU in have increased from: Cameroon (+25.7%), Ivory Coast (+14%), Belize (+34.3%), Suriname (+21.1%), Windward Islands (+12%) and Ghana (+37.6%), (see table 1). On the contrary, Dominican Republic exports to the E.U. fell by 17.3% and Jamaica by 99.8 % (see table 1). ACP countries do not use to export bananas to USA: in they exported only 133 tonnes. The very good ACP outcome, which is the best result ever for these group of countries, has kept an upward trend notably during the last four months of the year, when some Caribbean countries recovered from hurricanes damages of the previous year (see chart here below). 15
Imports from ACP zone (all countries) 105.000 90.000 Tonnes 75.000 60.000 45.000 30.000 1 2 3 4 5 6 7 8 9 10 11 12 January - December Source: Eurostat 9. Main news on bananas during. 9.1. Banana industry in Martinique and Guadeloupe after Hurricane Dean. Banana production in Martinique and Guadeloupe were almost completely destroyed by Hurricane Dean in August. On 8 April, after almost 8 months, a ship loaded with 4 800 tons of bananas from Martinique arrived in the port of Dunkirk. 9.2. Damages in Dominican Republic. According to local press storms Noel and Olga provoked economic losses which exceeded RD $ 900 million (about US $ 27 million) and exports to the E.U. decreased from 3 700 to 2 300 tonnes per week, a reduction of 38%. Banana producers and exporters, who ended up with 4 875 hectares of plantations affected by the storms Noel and Olga in the end of, were afraid that they will be forced out of the international markets by Ecuador and Peru. According to the President of the Association of Banana Producers (ADOBANANO) Ecuador and Peru have made significant advances in the organic banana production and they could take some of E.U. market share of Dominican Republic. 9.3. E.U. Commission's decision on banana cartel. 16
On 15 October the E.U. Commission found that banana importers Chiquita, Dole and Weichert participated in a cartel between 2000 and 2002 in violation of the EC Treaty's ban on cartels and restrictive practices (Article 81). The Commission decided a total of 60 300 000 in fines on Dole and Weichert. Chiquita was not fined as it provided information to the Commission that enabled it to open its investigation. Hence, the fines on Dole and Weichert were reduced by 60% in view of the particular circumstances of the case. On January 2 nd 2009, Weichert lodged an appeal before the European Court of First Instance in Luxemburg requesting the Court to annul the EU Commission's decision above mentioned. 9.4. ACP new developments on bananas. In March Chiquita announced a strategic association in Angola and Mozambique for the export of bananas to the E.U. Chiquita expects to provide 20% to 30% of the company's volume in the E.U. from these sources, upon project completion. Chiquita planned to start the exports in the end of 2010. According to the press, in April 2009 the Cameroon Development Corporation will start developing a 1 750 hectare banana plantation in the Boa plain, in Cameroon. 10. Further news on bananas. 10.1 Findings of the Panels and the Appeal on bananas In March, at the request of Ecuador, the WTO set up a panel in order to examine the claims raised by Ecuador concerning the ACP preference and quota and the MFN tariff level in the current E.U. banana import regime. The final report from the WTO, delivered to the parties on April, found that the E.U. importing regime was inconsistent with the following WTO rules: Art. 1 :1 concerning the preference granted by the E.U. to the ACP bananas; Art. XIII on the ACP quota; Art. II:1 on the level of the current MFN tariff, which has been found in excess of that provided in E.U.'s schedule 10.2. WTO reject of EU appeal on banana ruling. The World Trade Organisation on 26 November rejected an appeal by the European Union against a WTO condemnation of its banana import regime, following a complaint by Ecuador and the United States. 17
The ruling by the WTO's appeal body upheld the earlier decision that "the EC bananas import regime, in particular, its duty-free tariff quota reserved for ACP countries, was inconsistent with WTO rules. 11. Conclusions. Banana imports into the E.U. have followed an upward trend over the last three years, since the market was deregulated in the EU in January, with a surge of 23.5% between and. Due to the increased market access in recent years, MFN imports into the E.U. have risen sharply from both main sources of banana imports, MFN and ACP: From MFN countries imports grew from 3 161 104 tonnes in to 3 930 663 tonnes in (an increase of 24%), accounting for 81% of total import volume in the E.U., compared to 80% in. From ACP origins, banana imports increased from 763 618 in to 918 312 tonnes in (an increase of 20%), which represents an almost stable market share, about 20%. This shows that current equilibrium of the E.U. market takes into account the interests of all suppliers, giving to all of them much more opportunities and new market access. Bananas shipped from Ecuador, Costa Rica and Colombia, the top three E.U. suppliers in terms of volume, together accounted for 72% of total imports in, compared to 70% in. All the stakeholders on the world banana market have benefited of the liberalization of the E.U. banana market, included the distributors, who in recent years have profited very well of the new EU banana import regime. Producers in the third countries were paid more for their fruit, retailers took fat margins and consumers profited from lower prices. In, also the three public companies operating in the banana business (Chiquita, Del Monte and Fyffes) continued to improve their profitability on the E.U. market. Mr. Aguirre, Chairman and Chief Executive Officer of Chiquita International declared in November : "In our European banana business, we benefited from a stronger Euro, local prices and volumes decreased only modestly, as we continued our strategy to maintain our premium position and focus more on profit than on market share". All the signals are that the banana market has reacted very positively to the EU change of import regime. It seems that this is due, notably, to a certain shortage of product which keeps producers prices at high levels, but this additional cost is not transferred to consumers due to more competition among companies. 18
This clearly suggest that the rate (import charge) of 176 per tonnes, which was intended to at least maintain market access at traditional levels, has turned out to be relatively low and does not hinder imports: during the year MFN banana imports into the EU increased by 10.7%, in by 10.2% and in by a further 2.3%, compared to an ACP increase in of 17% followed by a decrease in of 6% and in an increase of 9.7%. On the contrary, compared to past references, current import duty appears that it has facilitated imports. After three years of operation of the Tariff Only import system the trend is unambiguous: MFN and ACP bananas imports into the E.U. are continually increasing, and EU banana imports as a whole have expanded during these three years by 23.5%: MFN +24% and ACP + 20%. 19
LIST OF TABLES AND CHARTS TABLES Table 1 Table 2 Table 3 Table 4 Evolution of bananas imports into the E.U., Eurostat data Evolution of bananas imports into U.S.A., USDA data Evolution of bananas imports into the E.U., 4 th quarter, Eurostat data Banana supply in the E.U., Eurostat data CHARTS: CHART 1 CHART 2 CHART 3 CHART 4 CHART 5 CHART 6 Imports from MFN countries, Eurostat Imports from Cameroon, Eurostat Imports from Ivory Coast, Eurostat Imports from Dominican Republic, Eurostat Imports from Belize, Eurostat Imports from Suriname, Eurostat 20
Table 1: Evolution of bananas imports into the E.U., Eurostat data 2003-12 -12-12 -12-12 -12 Av.2003/ Av./ Var./ Var.08/av.05-07 Var.08/av.03-05 Mexico 1.171 7.730 5.314 1.112 220 1.660 4.738 2.215 655,0% -25,0% -65,0% Guatemala 6.879 2.153 3.010 30.713 18.703 14.275 4.014 17.475-23,7% -18,3% 255,7% Honduras 25.232 21.193 23.091 21.768 30.390 23.954 23.172 25.083-21,2% -4,5% 3,4% Nicaragua 43 3 7 14 1 136,7% 610,0% -50,5% Costa Rica 802.040 856.407 634.511 834.063 970.669 893.395 764.319 813.081-8,0% 9,9% 16,9% Panama 381.454 370.834 281.639 312.978 353.991 294.588 344.642 316.203-16,8% -6,8% -14,5% Colombia 799.237 766.501 882.395 951.376 1.153.912 1.278.133 816.044 995.894 10,8% 28,3% 56,6% Venezuela 11.808 22.381 17.092 14.575 9.900 0 17.094 13.856 Ecuador 1.148.753 1.120.762 1.239.220 1.199.367 1.183.466 1.328.033 1.169.579 1.207.351 12,2% 10,0% 13,5% Peru 5.706 9.590 11.490 22.703 33.531 38.451 8.929 22.575 14,7% 70,3% 330,6% Brazil 49.962 51.984 63.337 95.595 85.865 58.154 55.095 81.599-32,3% -28,7% 5,6% Bolivia 17 0 0 6 Sri Lanka 0 4 6 5 7 7 3 6-4,1% 19,7% 108,8% Thailand 0 0 0 2 4 6 0 2 46,3% 195,1% 35,0 TOTAL 3.232.285 3.229.538 3.161.104 3.484.273 3.840.661 3.930.663 3.207.642 3.495.346 2,3% 12,5% 22,5% 2003-12 -12-12 -12-12 -12 Av.2003/ Av./ Var./ Var.08/av.05-07 Var.08/av.03-05 Cameroon 298.493 261.232 252.912 252.702 222.292 279.530 270.879 242.635 25,7% 15,2% 3,2% Ivory Coast 207.420 210.760 183.752 221.791 190.068 216.583 200.644 198.537 14,0% 9,1% 7,9% Dominican Rep. 111.948 101.337 144.683 176.757 206.164 170.396 119.323 175.868-17,3% -3,1% 42,8% Belize 73.806 80.292 74.189 73.207 61.175 82.146 76.095 69.523 34,3% 18,2% 8,0% Surinam 19.447 35.258 45.146 54.342 65.812 18.235 44.915 21,1% 46,5% 260,9% St.Lucia 32.520 42.872 28.243 36.726 30.456 38.512 34.545 31.808 26,5% 21,1% 11,5% St-Vincent 20.911 23.962 15.893 17.239 13.792 8.975 20.255 15.641-34,9% -42,6% -55,7% Dominica 10.494 12.167 12.814 13.298 7.291 10.281 11.825 11.134 41,0% -7,7% -13,1% Jamaica 41.775 28.660 11.654 31.863 18.371 40 27.363 20.629-99,8% -99,8% -99,9% Ghana 946 1.788 4.207 22.404 33.404 45.951 2.314 20.005 37,6% 129,7% 1886,0% Rwanda 41 39 57 59 59 31 46 58-47,5% -46,9% -32,1% Uganda 17 17 23 29 46 55 19 33 19,6% 68,4% 189,5% TOTAL 798.760 782.924 763.618 891.133 837.353 918.312 781.768 830.701 9,7% 10,5% 17,5% Total MFN+ACP 4.031.046 4.012.462 3.924.722 4.375.406 4.678.013 4.848.975 3.989.410 4.326.047 3,7% 12,1% 21,5% 21
TABLE 2: Evolution of bananas imports into U.S.A., USDA data February 27, 2009 UNITED STATES DEPARTMENT OF AGRICULTURE FOREIGN AGRICULTURAL SERVICE FAS AGRICULTURAL IMPORT AGGREGATIONS AND HS-10 DIGIT IMPORT COMMODITIES AREA/COUNTRIES OF ORIGIN JANUARY - DECEMBER JANUARY - DECEMBER AND COMMODITIES IMPORTED QUANTITIES COMPARISONS CONSUMPTION IMPORTS 2003 %CHNG COLOMBIA BANANAS, FRESH 0803002020 MT 469,306.0 464,592.4 513,748.3 473,825.6 377,231.8 377,231.8 450,757.3 19.49 COSTA RICA BANANAS, FRESH 0803002020 MT 976,078.0 865,297.9 822,730.5 927,360.6 1,036,897.2 1,036,897.2 874,424.0-15.67 DOMINICAN REPUBLIC BANANAS, FRESH 0803002020 MT 2,135.8 5,200.5 4,436.9 6,213.4 1,720.2 1,720.2 111.7-93.51 ECUADOR BANANAS, FRESH 0803002020 MT 972,474.5 918,926.3 904,306.3 994,335.2 929,174.6 929,174.6 830,268.3-10.64 GUATEMALA BANANAS, FRESH 0803002020 MT 934,136.4 1,020,764.9 1,029,280.0 912,902.1 1,093,390.7 1,093,390.7 1,188,724.0 8.72 HONDURAS BANANAS, FRESH 0803002020 MT 432,145.1 507,914.3 453,011.2 422,904.7 482,732.0 482,732.0 503,810.1 4.37 JAMAICA BANANAS, FRESH 0803002020 MT 93.6 0.0 0.0 0.0 0.0 0.0 21.0 -- MEXICO BANANAS, FRESH 0803002020 MT 35,196.9 33,585.6 33,795.6 38,573.0 31,507.9 31,507.9 66,330.3 110.52 NICARAGUA BANANAS, FRESH 0803002020 MT 41,619.8 41,502.2 38,066.6 30,465.0 32,788.2 32,788.2 31,142.4-5.02 PERU BANANAS, FRESH 0803002020 MT 13,756.3 12,384.0 22,344.8 25,055.5 17,847.7 17,847.7 22,510.6 26.13 PANAMA BANANAS, FRESH 0803002020 MT 214.9 611.9 2,019.0 7,515.5 501.9 501.9 8,045.9 1503.09 PHILIPPINES BANANAS, FRESH 0803002020 MT 63.7 38.8 0.0 0.0 0.0 0.0 0.0 -- VENEZUELA BANANAS, FRESH 0803002020 MT 1,929.6 2,007.5 670.1 316.5 0.0 0.0 0.0 -- LEEWARD-WINDWARD ISL(*) BANANAS, FRESH 0803002020 MT 0.0 0.0 0.0 0.0 8.2 8.2 0.0 -- TOTAL MT 3,879,150.6 3,872,826.4 3,824,409.3 3,839,466.9 4,003,800.4 4,003,800.4 3,976,145.6-0.69 Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics Note: All zeroes for a data item may show that statistics exist in the other import type. Consumption or General. (*) denotes a country that is a summarization of its component countries. 22
TABLE 3: Evolution of bananas imports into the E.U., 4 th quarter, Eurostat data -10-11 -12 Cum.4th.Qt. -10-11 -12 Cum.4th.Qt. Var.4th.Qt. 2.007 2.008 - Mexico 0 1 6 7 368 850 268 1.486 20256,2% Guatemala 6.245 3.551 1.361 11.157 1.906 851 939 3.696-66,9% Honduras 2.599 3.129 2.919 8.647 3.128 1.664 1.396 6.188-28,4% Nicaragua 0 0 0 0 0 0 0 0 Costa Rica 98.090 93.507 87.852 279.449 83.530 76.347 58.811 218.688-21,7% Panama 32.047 37.996 26.701 96.744 23.490 36.079 20.968 80.537-16,8% Colombia 120.284 104.922 87.552 312.757 122.055 104.340 103.714 330.109 5,5% Venezuela 401 281 159 841 0 0 0 0 Ecuador 95.326 89.410 84.750 269.487 101.301 86.694 93.241 281.236 4,4% Peru 3.801 3.697 3.546 11.044 3.012 2.493 2.627 8.132-26,4% Brazil 5.287 7.417 7.388 20.092 4.251 3.682 4.328 12.261-39,0% Bolivia 0 0 0 0 0 0 0 0 Sri Lanka 1 1 1 2 1 0 1 2 0,0% Thailand 0 0 0 0 1 1 1 3 650,0% Total 364.081 343.912 302.235 1.010.228 343.043 313.001 286.294 942.338-6,7% -10-11 -12 Cum.4th.Qt. -10-11 -12 Cum.4th.Qt. Var.4th.Qt. 2.007 2.008 - Cameroon 17.558 22.920 20.997 61.475 31.173 26.069 24.433 81.675 32,9% Ivory Coast 17.287 18.971 12.979 49.237 24.528 19.535 17.230 61.293 24,5% Dominican R, 16.451 15.617 12.237 44.305 17.503 15.238 13.918 46.659 5,3% Belize 4.522 6.481 4.744 15.748 8.726 6.999 6.279 22.004 39,7% Surinam 5.705 6.238 3.284 15.227 5.879 7.507 7.563 20.949 37,6% St Lucia 1.137 1.298 1.187 3.623 3.464 3.413 4.014 10.891 200,6% St Vincent 715 876 834 2.425 468 552 747 1.767-27,1% Dominica 45 20 29 94 858 697 1.935 3.490 3612,8% Jamaica 0 0 0 0 0 0 Ghana 3.741 4.949 4.197 12.887 3.758 3.072 3.412 10.242-20,5% Grenada 0 0 0 0 0 0 0 0 Somalia 0 0 0 0 0 0 0 0 Total 67.162 77.371 60.488 205.020 96.357 83.082 79.531 258.970 26,3% Total MFN+ACP 431.242 421.283 362.723 1.215.248 439.400 396.083 365.825 1.201.308-1,1% 23
BANANA SUPPLY IN THE EU TABLE 4: Banana supply in the E.U., Eurostat data NC 08030019 EUR-27. Tonnes ORIGIN 2002 2003 EU 801.122 765.416 758.206 648.375 641.559 554.734 Greece 2.433 2.670 2.868 2.932 2.948 2.943 Spain 407.343 400.941 418.407 344.977 348.184 361.355 France 358.943 329.223 305.270 280.474 268.585 167.298 Martinique 263.880 243.706 246.199 226.243 220.775 129.293 Guadeloupe 95.063 85.517 59.071 54.231 47.810 38.005 Chypre* 10.500 11.200 10.500 5.827 6.525 5.950 Portugal 21.903 21.382 21.161 14165 15.317 17.188 ACP Countries 739.491 798.761 782.923 763.620 891.133 837.355 918.226 Cameroon 236.477 298.493 261.232 252.912 252.702 222.292 279.530 Ivory-Coast 216.718 207.420 210.760 183.752 221.791 190.068 216.583 Belize 38.709 73.806 80.292 74.189 73.207 61.175 82.146 Jamaïca 40.600 41.775 28.660 11.654 31.863 18.371 40 Saint-Lucia 49.313 32.520 42.872 28.243 36.726 30.456 38.512 Saint-Vincent 32.520 20.911 23.962 15.893 17.239 13.792 8.975 Dominique 17.467 10.494 12.167 12.814 13.298 7.291 10.281 Grenada 557 448 406 0 0 0 0 Surinam 6.548 0 19.447 35.258 45.146 54.342 65.812 Somalia 0 0 0 15 0 0 0 Domin. Rep. 97.332 111.948 101.337 144.683 176.757 206.164 170.396 Ghana 3.250 946 1.788 4.207 22.404 33.404 45.951 DOLLAR 3.158.009 3.232.285 3.229.539 3.161.105 3.484.257 3.840.661 3.930.663 ZONE Ecuador 1.156.983 1.148.753 1.120.762 1.239.220 1.199.367 1.183.466 1.328.033 Costa Rica 746.290 802.040 856.407 634.511 834.063 970.669 893.395 Colombia 768.037 799.237 766.501 882.395 951.376 1.153.912 1.278.133 Panama 396.153 381.454 370.834 281.639 312.978 353.991 294.588 Brazil 36.226 49.962 51.984 63.337 95.595 85.865 58.154 Venezuela 9.546 11.808 22.381 17.092 14.575 9.900 0 Honduras 34.523 25.232 21.193 23.091 21.768 30.390 23.954 Peru 6.804 5.706 9.590 11.490 22.703 33.531 38.451 Guatemala 1.033 6.879 2.153 3.010 30.713 18.703 14.275 Mexico 1.562 1.171 7.730 5.314 1.112 220 1.660 Nicaragua 849 43 0 0 0 3 7 Sri Lanka 2 0 4 6 5 7 7 Thailand 1 0 0 0 2 4 6 ACP + DOLLAR ACP + DOLLAR + EU 3.897.500 4.031.046 4.012.462 3.924.725 4.375.390 4.678.016 4.848.889 4.698.622 4.796.462 4.770.668 4.573.100 5.016.949 5.232.750 Source: MS Communications (EU) / For EU production in, EU estimation. Source: Eurostat EU-27: provisional data extracted on 20/02/2009 / Comext (ACP & DOLLAR Z.) 24
Imports from MFN zone (all countries) 400.000 350.000 Tonnes 300.000 250.000 200.000 150.000 1 2 3 4 5 6 7 8 9 10 11 12 January - December Monthly Imports from Cameroon 40.000 30.000 Tonnes 20.000 10.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January - December 25
Monthly Imports from Ivory Coast 30.000 Tonnes 20.000 10.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January - December Monthly Imports from Dominican Republic 30.000 Tonnes 20.000 10.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January - December 26
Monthly Imports from Belize 12.000 9.000 Tonnes 6.000 3.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January - December Monthly Imports from Suriname 10.000 8.000 Tonnes 6.000 4.000 2.000 0 1 2 3 4 5 6 7 8 9 10 11 12 January-December 27