Increased competitive challenges in prospect for ACP banana exporters
04 July 2014
According to press reports, adjustments to shipping schedules between Ecuador and Europe are set to reduce banana shipment times and improve handling logistics for rapid onward transportation from the port of Antwerp. Antwerp will now be the first port of call for the Ecuadorian group Noboa, which has “decided to send its Bonita brand… by container carrier instead of traditional refrigerated ships”, in order to take advantage of the new scheduling. This will allow the immediate transhipment and clearance of the bananas, cutting transportation costs.
Costa Rica, meanwhile, has established a banana geographical indication (GI) to assist in developing its market in the EU, following the conclusion of the EU–Central American agreements. At present, some 49% of Costa Rica’s total banana exports are destined for the EU market. It is thought that in the coming years, the country’s banana exporters will need to pay greater attention to market positioning.
In India, efforts are in progress to develop branding strategies to overcome negative retailer/consumer perceptions of Indian bananas. The Indian trading company INI Farms is working with farmers to ensure high production standards and overseas accreditation with such schemes as GlobalGap. While the company has already penetrated markets in the Gulf and Middle East, INI Farms is now “eyeing new markets in Europe”. In the long term, the company is planning to “compete against rival suppliers in the leading banana growing countries of Latin America and the Philippines”.
Editorial comment
The negotiation of new shipping schedules and clearance arrangements can all serve to reduce costs, while registration of GIs and the development of product brands can improve producer returns on banana exports to the EU market. Many non-ACP exporters have concluded, or are hoping to conclude, FTA agreements with the EU that include tariff reductions for exports of bananas to the EU market, and are actively seeking to improve their competitive position on the EU market.
This is likely to increase commercial competition on the EU market for ACP banana exporters in the coming years. In preparing for this increased competition, it would appear necessary for ACP banana exporters to develop and adopt similar marketing strategies.
While these will essentially need to be developed at the national or regional levels, led by the private sector, there would appear to be scope for joint ACP initiatives to:
- identify evolving market, logistical and policy trends (e.g. the differential application of moves to full recovery of inspection costs among EU member states) affecting ACP banana exporters;
- outline the most viable options open to ACP banana exporters in terms of improving their marketing positioning within the EU;
- establish what supportive measures governments will need to be set in place to facilitate processes of market repositioning (e.g. the establishment of an internationally recognised organic product regime and the negotiation of equivalency agreements).
