Sector News

Aldi hikes up banana prices to aid South American producers facing “out-of-control” inflation

December 19, 2021
Food & Drink

The German supermarket chain Aldi will increase the price of bananas by €0.90 (US$1.01) per kilo, meaning €1.63 per box (US$1.84), by 2022.

This gesture comes after months of Latin American banana producers and exporters denouncing on several occasions the “enormous injustice” in the market, where costs continue to rise, but the purchase price remains constant.

Banana producers join forces
The Latin American Banana Task Force, encompassing the main banana producers from South America, has set out statements calling upon Aldi to do more to aid the sector.

The task force comprises producers from Ecuador, Colombia, Guatemala, Honduras, Dominican Republic, Panama and Costa Rica.

“Supermarkets and consumers must be conscientious of this terribly dire scenario, which has been further affected by rising prices and out-of-control inflation,” underscores Julio Mérida, executive director of the Association of Independent Banana Producers of Guatemala (APIB).

“If there ever was a time to raise prices in the name of shared responsibility and fairness, then this is such a time. Simply put, banana producers can’t carry the burden by themselves any longer,” he asserts.

“Banana producers must comply with local regulations, international certifications, a variety of best practices and last, but certainly not least, threats such as Fusarium TR4 and COVID-19.”

Shouldering responsibility
ALDI is the biggest buyer of bananas in the European market and the purchase price dictated by this supermarket is used as a reference price for the rest of the buyers. “In other words, no one will be willing to pay more than what the German giant pays,” states the Latin American Banana Task Force.

“However, taking into account that the average increase in freight cost is US$1.90 and carton cost is US$1 per box, we, the banana producers, are already experiencing a deficit of US$1.06 per box,” outlines the coalition.

“All this without taking into account the increased costs at the production level, such as fertilizers, which have risen by 45%, the costs of Fusarium RT4 prevention or anti-COVID-19 measures,” the stakeholders maintain.

“On the one hand, ALDI recognizes the need to pay a fair price for the fruit in accordance with the request of Latin American banana producers and exporters. Even so, the price increase does not cover the higher costs incurred. Expenses that in many cases do not even depend on the banana producers and exporters.”

More can and should be done
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.

“More commitment is needed from all of us in the agribusiness, especially the big buyers, not to leave banana producers alone in maintaining employment and absorbing cost increases,” remarks Emerson Aguirre, president of the Association of Colombian Banana Producers (AUGURA).

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.

“In order for producers to maintain the sustainability and quality standards demanded by the EU and the UK, it is necessary to pay a fair price and develop a scheme of shared responsibility, from producers to buyers, including retailers,” says Richard Salazar, president of the Association of Banana Marketing and Export of Ecuador (ACORBANEC) and member of the Banana Cluster of Ecuador.

“We express our great concern about the aspirations of the European supermarkets in the negotiations, which do not take into account the reality of the international markets and what the year 2022 holds in store,” adds José Antonio Hidalgo, executive director of the Association of Banana Exporters of Ecuador (AEBE).

“We hope that the supermarkets of the European Union will act consistently with the problems for the sustainability and future of the Latin American banana sector, understanding that the sacrifices cannot come only from the countries of origin. Only by working together and not ignoring reality will we manage to achieve finding bananas in supermarkets across the world.”

Edited by Benjamin Ferrer


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