United States: let the party go on!

Published on 30/01/2014 - Published by LOEILLET Denis
FruiTrop n°218 , Page From 59 to 59
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Product(s) : Banana
Rubrique / Thématique : Economic analyses
Country : United States
Keywords : Retail , Import , Price

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FruitTrop Magazine n°218

Banana Prices Close-up

Publication date : 30/01/2014
Price : Free
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United States: let the party go on!

The US banana world is no longer what it once was! Doubtless it would be a great exaggeration to draw that conclusion based solely on the stumble of 2013. Yet on a market which has kept beating records in terms of spot prices five times in a row, the slightest hitch is manna from heaven for the analyst bored with such a well-oiled market. We have to recognise the obvious fact that the spot import price fell in 2013. We should be aware that it is not yet a catastrophe. We are talking about a fall of 4 %, i.e. the exact percentage of the drop in the European price (CIRAD barometer). We should remember that the spot price is still up by more 5 euros/box from 2007. This is such a big increase (nearly 50 %) that there is no point checking whether inflation ended up wiping it out. We should note we are talking about the spot price (source: Sopisco) rather than the actual contracts. Yet we can bet that it gives a good idea of the general evolution of the import price. This observation is all the more important with the high contractualisation of the American market.

As with the EU, the 2013 season seems as an annual average to have been very similar to 2012. As with the EU, it is only an illusion since while the average is comparable, the price evolution week by week was very different. In 2012, we climbed to peaks throughout the first quarter. This was not at all the case in 2013. Indeed, the weekly variability of the spot price was reduced to its simplest expression: barely 0.20 USD/box for the US average price series, as opposed to 1.4 USD/box in 2012. Furthermore, this is the lowest standard deviation ever recorded in the United States. This does not mean that there is no difference between the three main regions: Gulf, East Coast and West Coast. The Gulf is still holding its own, whereas the West Coast is often used as the low benchmark, with the exception of the last quarter of 2013.

The surprises end there. In 2013, the retail price stuck to precisely the same levels as in 2012, at 1.32 USD/kg. One of the characteristics in common with the supply in Europe is its positioning at the retail stage: the banana is a staple product, or even more so than in Europe. The apple (benchmark Red Delicious) or orange (benchmark Navel) are twice as expensive as the banana: 2.5 USD/kg for the orange, 3.07 for the apple and just 1.32 USD for the banana.

The retail price to import price ratio remained practically identical, going from 1.45 to 1.50. The same can be said for the price gap between these two stages amounting to 0.44 USD/kg, as opposed to barely less in 2012, 0.41 USD/kg. Although a full FruiTrop report will be dedicated to consumption in April 2014, we can already say that it is on the rise. Over the first ten months of the year, it went up by 4.5 % from 2012 and 12 % from 2010. This is continuous progression.