There are fears that bananas could become a key weapon in the impending price war between Tesco and Asda.
In the wake of Asda’s pledge to slash £102m off its overall prices, industry commentators believe that a price crash for bananas could be facilitated by the EU’s single tariff system for imports, which came into effect this month.
Already, volumes of bananas from Ecuador, the cheapest Latin American supplier, are said to be up to 20% higher than under the previous quota regime.
Alistair Smith, international co-ordinator of pro-Caribbean campaign
group Banana Link, said a general shortage of bananas, caused by a series of hurricanes that hit parts of Central America and Ecuador in the past few months, had led to prices being higher than normal at this time of year.
He added:“The current high prices are not a result of the new tariff system. And there is agreement that, come April and May, once volumes have come back to normal and the market experiences its seasonal lull, prices will crash.
“It is a worry that UK retailers may try to bring a downward trend to the retail price of bananas, which will be damaging to suppliers and others in the chain.
“There is no indication whether or not bananas will be included in the multiples’ price war, but Asda’s declaration is worrying, and bananas are one of the known value items.”
Bananas are selling at an average of 85p/kg, according to last week’s Price Flash survey of fresh produce prices in the big four. This time last year they stood at 74p/kg.
Meanwhile, representatives of three of the Latin American banana-producing countries are continuing to seek a reduction in the €176/tonne tariff imposed this month. Honduras, Panama and Nicaragua have initiated talks with the WTO.
Greg Meenehan
In the wake of Asda’s pledge to slash £102m off its overall prices, industry commentators believe that a price crash for bananas could be facilitated by the EU’s single tariff system for imports, which came into effect this month.
Already, volumes of bananas from Ecuador, the cheapest Latin American supplier, are said to be up to 20% higher than under the previous quota regime.
Alistair Smith, international co-ordinator of pro-Caribbean campaign
group Banana Link, said a general shortage of bananas, caused by a series of hurricanes that hit parts of Central America and Ecuador in the past few months, had led to prices being higher than normal at this time of year.
He added:“The current high prices are not a result of the new tariff system. And there is agreement that, come April and May, once volumes have come back to normal and the market experiences its seasonal lull, prices will crash.
“It is a worry that UK retailers may try to bring a downward trend to the retail price of bananas, which will be damaging to suppliers and others in the chain.
“There is no indication whether or not bananas will be included in the multiples’ price war, but Asda’s declaration is worrying, and bananas are one of the known value items.”
Bananas are selling at an average of 85p/kg, according to last week’s Price Flash survey of fresh produce prices in the big four. This time last year they stood at 74p/kg.
Meanwhile, representatives of three of the Latin American banana-producing countries are continuing to seek a reduction in the €176/tonne tariff imposed this month. Honduras, Panama and Nicaragua have initiated talks with the WTO.
Greg Meenehan
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