Is EU banana sector in crisis?

Thu 14/06/2018 by Richard Wilkinson

The trade agreements signed between the EU and Latin American countries providing tariff preferences includes safeguard clauses and a stabilisation mechanism for European producers. Despite the EU commission stating that the increase in imports of Latin American bananas would have no negative impact on the price levels and stability of the European market, in contrast with most years, when banana prices begin to fall in May, this year prices plummeted in April, from €19 per 18.5kg box in Poland to €3. This would appear to mark the commencement of a structural crisis of overproduction in the banana sector.

The exponential growth seen in Latin American banana production, coupled with the fact that export thresholds granted by the EU are regularly exceeded, the EU commission is being urged by European producers to take steps to protect the region’s banana production. One proposal is to temporarily suspend preferential tariffs.

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