To address surging costs, Fairtrade has raised its minimum banana prices by an average 4.5% at the farm level, plus an extra 15% for producers who export their bananas directly. The increases are the highest in several years.
Silvia Campos, Fairtrade’s senior advisor for bananas, said: “We recognise many consumers, workers, and farmers are suffering from the current cost of living crisis but the burden of carrying the increased costs cannot be shouldered by farmers alone.”
Data collected by Fairtrade from numerous Fairtrade-certified banana farms and verified by technical experts show that fertiliser prices have increased by 70% since 2021, with fuel costs up by 39%, and pallets and plastic packaging up by more than 20%. Costs for the four other key inputs and services collected – labour, carton boxes, inland freight, and port charges – have all increased too.
The new minimum price will come into effect on 1 January 2023, with contracts for 2023 currently being negotiated between buyers and producers. For the first time, Fairtrade is also publishing costs for eight key inputs and services needed for banana production, for each producing country. Fairtrade said that this provided transparency on the costs behind the new minimum prices and would help producers and traders to better negotiate their contracts.