Market Overview – Week 5 / 2010

Banana selling prices in St. Petersburg started at US$10.60 CIF reaching levels of around USD 14.80 on average on CIF terms, by the end of the week.

Around 1.200.000 boxes were discharged and 1.050.000 cartons are expected for the next.

Traders are expecting further price increases next week.

Banana selling prices in the Mediterranean were around USD 13.00 CIF per box and around USD 0.50 cents higher at the Black Sea but traders said consumption remains low, for next week they expect increases of around US$1.00 per box or more to compensate for the high prices of the fruit at the Ecuadorian spot market.

Prices in the Ecuadorian spot market have also increased, reaching levels of around USD 11.00-11.50 FOB for the box of almost 19Kg net, the upward trend keeps strong for next week.

Market watchers reported that the fruit availability is low and that large amounts have been rejected due to lack of grade. It has been estimated that the banana production decreased around 30% this week.

Multinational companies are also sourcing additional fruit at the spot market. One of them said it might source around 200.000 boxes per week until week 20.

For all the above reasons, some vessels have been left to be completed next week due to the scarcity of fruit.

On the shipping front, this was not a very good week for owners, maybe because many of the people involved in the fruit business were at the Fruit Logistic fair in Germany, they expect more activity next week, but meanwhile there were a few fixtures at lower than expected freights for the current period.

The following banana fixtures were put on record:

Ecuador – 2 Med around USD 5.95 per box free D/A

Ecuador – Med around USD 4.80 per box

Time charter for larger vessels was around US cents 50 per cbft per month and around US cents 65 for smaller tonnage.

Dole Food Company, Inc. Announces Launch of Credit Facilities Amendments and Strong Results for 2009

Dole Food Company, Inc. on February 4 announced that it has launched amendments to its senior secured credit facilities that Dole expects will reduce its interest expense, extend its maturities and provide for the redemption of the remaining $70 million principal amount of its senior notes due 2011. This will put Dole’s nearest debt maturity in 2013. Dole also announced improved operating results, with 2009 Adjusted EBITDA of $417 million, lower year-end net debt of $1.478 billion, and a reduced 2009 leverage ratio of 3.5 times. For 2008, Adjusted EBITDA was $410 million, net debt was $2.113 billion, and the leverage ratio was 5.2 times.

David A. DeLorenzo, Dole’s President and CEO said: “Dole had another outstanding year in 2009. We continued to build on the strong operating performance achieved in 2008, generating outstanding cash flow, which allowed us to pay down a significant amount of debt. In addition, we had cash proceeds from asset sales in 2009 totaling approximately $185 million, bringing the two year total for asset sales to over $400 million – while growing EBITDA. During October 2009, we successfully completed an IPO of Dole common stock, raising $330 million of net proceeds to Dole, all of which was used to pay down debt and its related costs. In addition, in September 2009 we successfully refinanced $363 million of our 7.25% Senior Notes due 2010. We are pleased with the outstanding results achieved in 2009. Our operating results and our recent IPO have greatly strengthened our balance sheet. We are optimistic as we look forward to improving earnings and further reductions in costs and debt in 2010.”

Dole intends to hold a conference call concerning its complete 2009 results when it files its Form 10-K with the Securities and Exchange Commission, on or before April 2, 2010.

Banana producers begin procedure to get origin denomination certificate

The Association of Banana Producers Organizations of the Canary Islands (Asprocan from its Spanish initials) has taken the final step for this private brand to receive European recognition, and therefore, benefit from the protection and actions that the European Union has for foods of differentiated quality. This will mean that the brands will have public protection inside the community under a geographical protected identification.

The Canarian Institute of Agricultural Food Quality (ICCA from its Spanish initials) informed that they have been working to get the certification and European protection for many products and, in this way, have centred their efforts on products like bananas.

Several varieties of this fruit are cultivated in the Canary Islands, although they are traded under a common brand “Plátano de Canarias”. According to the director of the ICCA, Gullermo Díaz Guerra, this will imply that only the fruit produced in the islands, subject to controls and certifications, could be sold making reference of the Archipelago in any way, thus avoiding false competition. For Díaz Guerra, the news represents “an enormous satisfaction and a great quantitative and qualitative leap.”