The World Banana TradeEssay Preview: The World Banana TradeReport this essayThe World Banana Trade –A Brief Study: 90s – 2007.Table of ContentsBrief HistoryPage 2Principal Producing Countries & Exporting CountriesMajor Importing Countries & RegionsThe Top 5 Banana CompaniesBrief EU PolicyIssues in the 90sTransportation & HandlingShipping CompaniesFuture of the Reefer TradeConclusion & SummaryNote: Writing in Blue with inverted commas are verbatim from source.1. Brief History…The perhaps not so humble Banana, or scientifically part of the Genus Musa, belonging to the family Musaceae is considered to be derived from the wild species Musa acuminata (AA) and Musa balbisiana (BB) and was first recorded between 8,000 and 5,000 BC. It is a native of tropical south east Asia and was probably domesticated in Papua New Guinea. Today, this relatively resilient fruit is grown in at least 130 countries of the world and over the ages has survived Disease, Climatic Catastrophes and Political Pressures. Whereas one tends to associate high production with exports, about 85% of world banana production is consumed in the origin countries – the best example being India, where Alexander the Great first enjoyed them Circa 327 BC. India is today the largest producer of this flavoursome fruit globally, annually topping 18.5 million tons or 21.7% of the world s total production – but the majority of this is consumed at home. Another example is Uganda, which boasts a production of 10 million tones per annum of which perhaps 0.02% is exported.
Of the more than 1,000 types of known Banana subdivided into 50 groups, the one most commonly traded and shipped around the world is known as the Cavendish. The forerunner to the Cavendish, and one that aficionados felt tasted better was a variety known as the Gros Michel which unfortunately was virtually eradicated in the 60s thanks to a terminal fungal affliction known as Panama Disease. Conservative estimates vary on how long it took to wipe them out however it is thought that the initial outbreak was in the early 1900s which reached its peak in the 1960s. In any event, the hardier Cavendish was a fortunate replacement, thus ensuring that the worlds growing population was not deprived from enjoying this fruit. Bananas have very beneficial nutritional properties. They are a good source of vitamin C, B6 and A. Bananas have a high content of carbohydrates and fiber, while they are low in protein levels and fat free. They are also rich in potassium.
In the 70s, the Transnational companies involved in the banana trade were involved in every aspect of the chain – from cultivation to harvesting, transporting and retailing. Todays banana business is very different with the major multinationals concentrating more on their Core Competencies such as establishing strong retail relationships in which large Supermarket chains are increasingly showing more muscle.
As we shall see, over the past 20 years, there have been several fundamental changes in the Cultivation, Transportation and Management of Bananas globally making them rank as 4th in the list of staple crops in the world. Their ranking merits some numbers; in 1988, the global production of Bananas was about 45 million tons. Today it is closer to 85 million tons. The term Banana Republic is usually given rather loosely to South and Central American countries however in reality only Costa Rica, Honduras and Panama can be truly considered these, i.e. where the crop dominates their respective economies.
2. Principal Banana Producing Countries……In 2005, the world Banana output stood at 72.6 million tons. Although the fruit is produced in 130 countries, only 5 nations, namely Ecuador, Philippines, Costa Rica, Colombia and Guatemala are the heavyweights in exports, shipping almost 70% of world supply. As mentioned in the brief history, production does not translate into export. (Fig 1.1). For instance, the Philippines produces only 7.48% of the worlds Bananas, yet participates in 12% of the worlds export trade; similarly Ecuador, Costa Rica, Guatemala and Colombia each produce 6%, 2.08%, 1.5% and 1.5% of the worlds Bananas, but these countries export 29%, 13%, 7% and 19% respectively. In contrast, India, China, Brazil, Indonesia and Tanzania each produced 21.7%, 8.04%, 7.10%, 5.46% and 3.5% respectively however their exports were so negligible as not to be recorded.
ROTW signifies Rest Of the World and it should be mentioned here that African countries producing Bananas do so almost entirely for local consumption due in part to their economic situation. This is with exception to certain ACP countries (African, Caribbean & Pacific) who do export through special preferential access to the EU under the Lomé Convention (1975) and later the Cotonou Agreement (2000). (see Section 5)
Fig 1.1 (Source: UNCTAD)*Bananas are a very important commodity for developing countries, with a clear dual nature which complicates the analysis. They are at the same time a major staple commodity, together with rice, wheat and maize, and a fundamental export commodity. Around one fifth of globally produced bananas are exported from the developing countries to the developed countries, an example of unidirectional South-North trade. The duality is also present in production systems, where large-scale banana plantations, mainly oriented to export markets, coexist along with smallholder banana farmers.(UNCTAD) My italics: In 2005, a record 15 Atlantic Hurricanes had a significant effect on Central American crops however Ecuador, the main exporter of this region was spared.
The tropical tree is considered to be the biggest food-chain of the four branches, with a total annual net weight of 9 kg. The tropical tree is grown in tropical and arid Africa. The banana plant is widely distributed in Africa through the eastern areas of Africa, the tropics and the Central Asia region, especially in Nigeria and parts of the south. It is also grown for use by some Asian growers, notably Brazil, to produce sugar or tea, and for food. The annual net weight is estimated to be about 60 kg. Since the tropical tree is not fully grown at home, the amount of bananas consumed in the West, South and South East (OCE) is relatively small. This is a reason why not a whole lot of tropical fruit is grown in the developing countries. A lot of food-production is also done by using the tropical fruit, such as grapefruit, lemons, pomegranate and peaches, as its main food-source. The annual net weight of bananas grown in the West (OCE) in 2005 was about 25 kg. This is partly due to the fact that Africa is now growing too small for it, so that the tropical fruit is only half-grown and the fruit grown on a large scale is small (<0.1 kg). Therefore there is no demand for larger fruit (see fig 1.2 for comparison). The banana is commonly used as a staple in many foods including the usual supermarket meals like pasta, potatoes and other cereal. It also is used as a replacement for maize in traditional cereals for example cereals made from maize for which we eat more foods, as seen in the chocolate cake for example. The importance of the banana is also confirmed in the study on coconuts (see fig 1.2). The tropical fruit produces a significant amount of sugar as well as other important tropical fruits, though usually they are not used to make desserts. Nevertheless, they are a major food group for some areas when the banana is made in its natural context. The fruits and spices of banana contain the same sugar as bananas, so they have the same type of characteristics: a smooth white colour, a thick flesh, a soft texture and a light, soft, golden hue. The flavor depends on the time of year when growing up in these tropical areas. The fruits vary from bright to dark and not so black under certain conditions, but are generally golden or sweet in colour and light. The banana has a long and thin shelf life, so making them in one year is fairly economical. For more food-intensive foods, banana is not the same as coffee, so it is not suitable for this type of food. The bananas are grown in South-South Asia, South East and the Western countries by the British plantation companies which manufacture the fruit. In most cases, the bananas are not exported through South-South Asian markets, instead, they are imported from overseas. Figure 1.1 The banana is a major staple of developed countries. It is produced in tropical and arid African countries, where it has a
The tropical tree is considered to be the biggest food-chain of the four branches, with a total annual net weight of 9 kg. The tropical tree is grown in tropical and arid Africa. The banana plant is widely distributed in Africa through the eastern areas of Africa, the tropics and the Central Asia region, especially in Nigeria and parts of the south. It is also grown for use by some Asian growers, notably Brazil, to produce sugar or tea, and for food. The annual net weight is estimated to be about 60 kg. Since the tropical tree is not fully grown at home, the amount of bananas consumed in the West, South and South East (OCE) is relatively small. This is a reason why not a whole lot of tropical fruit is grown in the developing countries. A lot of food-production is also done by using the tropical fruit, such as grapefruit, lemons, pomegranate and peaches, as its main food-source. The annual net weight of bananas grown in the West (OCE) in 2005 was about 25 kg. This is partly due to the fact that Africa is now growing too small for it, so that the tropical fruit is only half-grown and the fruit grown on a large scale is small (<0.1 kg). Therefore there is no demand for larger fruit (see fig 1.2 for comparison). The banana is commonly used as a staple in many foods including the usual supermarket meals like pasta, potatoes and other cereal. It also is used as a replacement for maize in traditional cereals for example cereals made from maize for which we eat more foods, as seen in the chocolate cake for example. The importance of the banana is also confirmed in the study on coconuts (see fig 1.2). The tropical fruit produces a significant amount of sugar as well as other important tropical fruits, though usually they are not used to make desserts. Nevertheless, they are a major food group for some areas when the banana is made in its natural context. The fruits and spices of banana contain the same sugar as bananas, so they have the same type of characteristics: a smooth white colour, a thick flesh, a soft texture and a light, soft, golden hue. The flavor depends on the time of year when growing up in these tropical areas. The fruits vary from bright to dark and not so black under certain conditions, but are generally golden or sweet in colour and light. The banana has a long and thin shelf life, so making them in one year is fairly economical. For more food-intensive foods, banana is not the same as coffee, so it is not suitable for this type of food. The bananas are grown in South-South Asia, South East and the Western countries by the British plantation companies which manufacture the fruit. In most cases, the bananas are not exported through South-South Asian markets, instead, they are imported from overseas. Figure 1.1 The banana is a major staple of developed countries. It is produced in tropical and arid African countries, where it has a
The tropical tree is considered to be the biggest food-chain of the four branches, with a total annual net weight of 9 kg. The tropical tree is grown in tropical and arid Africa. The banana plant is widely distributed in Africa through the eastern areas of Africa, the tropics and the Central Asia region, especially in Nigeria and parts of the south. It is also grown for use by some Asian growers, notably Brazil, to produce sugar or tea, and for food. The annual net weight is estimated to be about 60 kg. Since the tropical tree is not fully grown at home, the amount of bananas consumed in the West, South and South East (OCE) is relatively small. This is a reason why not a whole lot of tropical fruit is grown in the developing countries. A lot of food-production is also done by using the tropical fruit, such as grapefruit, lemons, pomegranate and peaches, as its main food-source. The annual net weight of bananas grown in the West (OCE) in 2005 was about 25 kg. This is partly due to the fact that Africa is now growing too small for it, so that the tropical fruit is only half-grown and the fruit grown on a large scale is small (<0.1 kg). Therefore there is no demand for larger fruit (see fig 1.2 for comparison). The banana is commonly used as a staple in many foods including the usual supermarket meals like pasta, potatoes and other cereal. It also is used as a replacement for maize in traditional cereals for example cereals made from maize for which we eat more foods, as seen in the chocolate cake for example. The importance of the banana is also confirmed in the study on coconuts (see fig 1.2). The tropical fruit produces a significant amount of sugar as well as other important tropical fruits, though usually they are not used to make desserts. Nevertheless, they are a major food group for some areas when the banana is made in its natural context. The fruits and spices of banana contain the same sugar as bananas, so they have the same type of characteristics: a smooth white colour, a thick flesh, a soft texture and a light, soft, golden hue. The flavor depends on the time of year when growing up in these tropical areas. The fruits vary from bright to dark and not so black under certain conditions, but are generally golden or sweet in colour and light. The banana has a long and thin shelf life, so making them in one year is fairly economical. For more food-intensive foods, banana is not the same as coffee, so it is not suitable for this type of food. The bananas are grown in South-South Asia, South East and the Western countries by the British plantation companies which manufacture the fruit. In most cases, the bananas are not exported through South-South Asian markets, instead, they are imported from overseas. Figure 1.1 The banana is a major staple of developed countries. It is produced in tropical and arid African countries, where it has a
3. Major Importing Countries & Regions………The major importing markets for Bananas are essentially the EU, USA, Japan, Russian Federation, China and Canada (Fig 1.2). Both the Russian Federation as well as China developed their markets mainly in the early to mid 90s and by the late 90s, a number of reasons saw an oversupply in the world Banana market – these