The demand for bananas remained robust amidst the pandemic. Despite record exports from Ecuador, which remains the world’s largest banana supplier, prices in the largest import markets are rising due to strong demand and local COVID-related imbalances in supply chains. Driven by the growing population, the global banana market could reach 143M tonnes by 2030. The increasing epidemic of the TR4 fungus could reduce the growth potential and accelerate the rise in prices.
Key Trends and Insights
Bananas confidently retain their position as the most sought-after fruit in the world. Consumption in 2020 reached 124M tonnes, which is 6% more than the previous year. The increase in demand for bananas in the context of a growing world population will stimulate a market expansion of up to 143M tonnes by 2030.
During the pandemic, demand for bananas remained high in most countries. According to Eurostat, imports to EU countries rose by 5.6% y-o-y in 2020. Banana imports to the U.S. remained at the same level of the previous year (4.7M tonnes), while imports to China fell by 10% to 1.7M tonnes. Despite this, product consumption in China increased by 2.4% amid an increase in domestic production by 3.4% and a decrease in exports by 38.7%.
Strong demand amid supply chain disruptions during a period of tight constraints led to price increases in 2020 that varied from country to country. Bananas have gone up in price most significantly in Russia. In the first quarter of 2021, prices increased by one and a half times more compared to the previous year due to a combination of factors of stable demand within the country, a weakening of the ruble and a local shortage of supplies from Ecuador. The average annual banana price in the EU rose from $0.88 per kg in 2019 to $0.90 per kg in 2020, and in the U.S. it went from $1.14 per kg in 2019 to $1.22 per kg in 2020.
Ecuador remains the world’s largest banana supplier, accounting for 18.4% of the global export market. Despite labor shortages during a period of tight constraints and disruption to supply chains, the country increased banana exports by 7% y-o-y in 2020, driven by increased U.S. shipments and increased production from expanding acreage.
The threat to the global banana market comes not only from the COVID-19 pandemic, but also from the growing epidemic of the TR4 fungus that affects banana plantations. This blight has been known for a long time, but recently, it has been rapidly spreading to new regions. This creates the risk of a banana shortage in the world market and acceleration of rising prices. The market for organic bananas may be particularly affected, as crop protection chemicals are not permitted in their cultivation. In order to solve the problem, new genetically modified varieties and new means of their protection are being developed, which will lead to a restructuring of the value chains in the banana industry.
Global Banana Production
For the fourth year in a row, the global market recorded growth in production of bananas, which increased by 2% to 120M tonnes in 2020. The total output volume increased at an average annual rate of +1.2% from 2012 to 2020. In value terms, banana production rose remarkably to $78.3B in 2020 estimated in export prices.
India (31M tonnes) remains the largest banana producing country worldwide, accounting for 26% of total volume. Moreover, banana production in India exceeded the figures recorded by the second-largest producer, China (12M tonnes), threefold. Indonesia (7.5M tonnes) ranked third in terms of total production with a 6.2% share.
From 2012 to 2020, the average annual rate of growth in terms of volume in India totaled +2.0%. The remaining producing countries recorded the following average annual rates of production growth: China (+0.5% per year) and Indonesia (+2.4% per year).
Global Banana Imports
In 2020, the volume of bananas imported worldwide rose sharply to 23M tonnes, with an increase of 7.1% against 2019. The total import volume increased at an average annual rate of +4.5% over the period from 2012 to 2020. In value terms, banana imports amounted to $15.3B in 2020.
In 2020, the U.S. (4.7M tonnes), distantly followed by China (1.7M tonnes), Russia (1.6M tonnes), Germany (1.3M tonnes) and Japan (1.1M tonnes) were the key importers of bananas, together committing 45% of total imports. The following importers – the Netherlands (1,008K tonnes), the UK (978K tonnes), Italy (782K tonnes), France (700K tonnes), Belgium (676K tonnes), Canada (591K tonnes), Poland (559K tonnes) and Argentina (439K tonnes) – together made up 25% of total imports.
In value terms, the U.S. ($2.5B) constitutes the largest market for imported bananas worldwide, comprising 17% of global imports. The second position in the ranking was occupied by Russia ($1.2B), with a 7.5% share of global imports.