Dominican Republic: Banana Exports in A Difficult Situation
Dominican Today reports that the banana sector has been hit by rising costs and falling prices in international markets.
According to the local press, the increase in freight, fertilizers, and supplies such as boxes is a high-cost factor.
The report relays that the aggravating circumstance is that the destination markets refuse to assume these cost increases.
The report notes that the Dominican Republic exports about 455 containers per week, more than 90% of organic bananas.
From 2016 to date, the price of bananas has plummeted by almost 35% of the Dominican Republic's export price, the report discloses.
The report relays that the gap between the price of organic and conventional bananas is getting closer every day to the detriment of Dominican exporters.
This makes Dominican banana exports less competitive because the costs in this country are higher than those of other exporting countries, the report notes.
The fall in prices has to do with the deterioration in the purchasing power of the population of the consuming countries, aggravated by the war since Russia is one of the leading consuming countries of the fruit, the report relays.
The report discloses that the Dominican Republic had an advantage with the production of organic bananas, which had a much higher price than the conventional ones. Still, in recent years the difference in prices has been narrowing, with the aggravating fact that the European Union, instead of making the regulations, has increased them, increasing costs for that concept, making the Dominican exporters lose profitability, the report says.
In 2021, exports of fresh, organic, and dry bananas and plantains totalled US$228.8 million, an increase of 79.6% compared to the previous year, when they stood at US$127.4 million, the report notes.
Some 372,812.26 metric tons were exported, the report says.
When consulted on the matter, the president of the Dominican Association of Banana Producers (Asobanano), Hilario Pelegrini, raises the need to activate a national banana policy, bringing together private and government strategies to find a solution, the report relays.
He said that a relaxation of the producers' debt and the granting of financing to buy fertilizers are being negotiated with the Agricultural Bank, the report notes.
He said that banana growers were left heavily in debt from the damage caused by the 2016 and 2017 floods, the report adds.