EUROFRUIT

THE INTERNATIONAL MARKETING MAGAZINE FOR FRESH PRODUCE BUYERS IN EUROPE

EUROFRUITISSUE 445 2011 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV-DEC

OCTOBER 2011 ISSUE 445

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EMERGENCY FOR ECUADOR BANANA TRADE AS PRICES CRASH

Chile prepares for promotional push in Avocado Week How one former Chiquita executive is bringing retailers and growers closer
CAMPAIGNS

MARKETS

THE BOARDROOM

Its time we talked

THE RIPENING ROOM THE BOARDROOM MARKETS CAMPAIGNS THE CONVENTION CENTRE THE FIELD THE PACKHOUSE DISPATCHES

WHY ITALYS TOP FRUIT AND VEGETABLE RETAILERS ARE MORE DETERMINED THAN EVER TO TELL SHOPPERS WHATS ON OFFER

Previews of upcoming industry trade exhibitions Macfrut & Fruit Attraction

Plus: 22-page supplement Trade South Africa 2011

markets

report Peru

Organic banana boom offers Peru new potential

piuraOrganic bananas have offered Peruvian growers a highly profitable niche thanks to the ideal conditions of the Piura region, as well as rising environmental and social concerns among consumers.
by Jahir Lombana

mid the global financial crisis and economic uncertainty in major world

markets, producers in developing countries have taken advantage of the organic market niche to survive in these difficult times. According to a 2011 report by the International Federation of Organic Agriculture Movements (ifoam), the land devoted to organic production grew by 6 per cent between 2008 and 2009, with 2m additional hectares being converted. Bananas have been one of the flagship fresh products for this niche market. The reason for increased interest in organics in general, and organic bananas in particular, is the environmental and social benefit related to this type of production, an issue that is becoming increasingly important for producers and consumers alike. Environmentally, organic bananas are superior due to the high levels of deforestation, the pests and diseases, and the danger of water pollution connected to conventional production. Additionally, organic production often incorporates social elements such as fair wages and working conditions, which have been a constant doubt surrounding conventional production. Organic production began in Peru when small producers joined forces to cultivate organic products under socially responsible and environmentally friendly conditions. In 2009 Peru became the country with the most organic growers in South America, totalling more than 50,000. However, it is not just the private sector, but also the public sector that has contributed to this growth. In 2006, the Peruvian government introduced technical legislation for organic producers, and in 2008 it created a specific law for the promotion of organic and ecological products. From a production volume of practically zero back in 2000, Peru is now one of the largest global producers and exporters of organic bananas alongside the Dominican Republic. Organics are grown in several parts of Peru, but bananas are concentrated mainly in the north. In June, reports suggested that the Piura region accounted for some 91 per cent of production. This core area provides natural barriers against the main pests like Black Sigatoka, not least its dry tropical climate. And Peruvian production is constant, unlike in the Dominican Republic, which experiences a drop in output between July and August due to the rainfall and hurricanes in the Caribbean. In fact, the export peak begins in August and ends in October, giving Peru the largest window to the market in the month of August. Although data is lacking on production costs, as it is for fresh produce from most developing countries, the National Organic Banana Programme estimates that Peruvian organics benefit from lower labour costs for

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markets

OPPOSITE TOPDemand for Peruvian

Fairtrade bananas remains high

OPPOSITE BELOWPiura is the main

banana-growing region in Peru

LEFTPiura is also the most productive

region, at 24.5 tonnes per hectare

BELOWFair wages and working

conditions are increasingly important concerns for consumers

production and packaging than conventional bananas from Ecuador. The fob price for Peruvian bananas was estimated at US$0.60-0.70 per kilogram between January and June 2011 following a stable trend from 2010. In terms of productivity, Peru also stands at the top globally: Piura produces 24.5 tonnes per hectare; Tumbes 21.8 tonnes; La Libertad 19.9 tonnes and Amazonas 12.5 tonnes. According to national sources, Peruvian banana exports stood at 44,400 tonnes between January and June 2011, a six per cent rise over the year-earlier period. In value terms, exports exceeded US$28m, according to export promotion agency PromPeru, a 13 per cent increase over the same period in 2010. The projections remain positive for this year, but the recent crisis could change these estimates. The main export markets are currently the European Union (76 per cent), the US (15 per cent) and Japan (7 per cent), but PromPeru also highlights the opening of organic markets in South Korea and Ecuador. According to sunat, Perus customs agency, the main exporter in 2010 was the Corporacin Peruana de Desarrollo Bananero, which accounts for a third of total Peruvian exports, followed by Bio Costa with about a quarter, and then the likes of Grupo Hualtaco, Central Piurana de Asociaciones de Pequeos Productores de Banano, Inkabana, Organia, Pronatur, Agrorganic and Asociacin de Bananeros Orgnicos Solidarios. Until the 1990s, the production and marketing of organic bananas were primarily the concern of small agents, but gradually the multinationals, traditionally oriented Inter-American Development Banks Multilateral Investment Fund (mif). The demand for organic products is booming, in spite of the crisis. In developed countries, there are growing concerns about traceability, food safety and social and environmental conditions. Consumers now have a lot of information and everyone in the supply chain needs to be sure to provide the correct information and even anticipate customer requirements. Due to the favourable environmental and social conditions connected with organic bananas, consumers are prepared to pay a premium, but growers and exporters should continue to be creative in order to maintain the margin that keeps this exclusive niche alive. towards conventional bananas, have entered the niche. Doles presence in Piura has grown from 62,000 boxes and 200 producers in 2001 to 1,376,000 boxes and over 1,500 producers in 2011. This increase has been facilitated by the participation of multilateral institutions like the Conventional bananas are now becoming cleaner due to the recent rise in environmental awareness throughout the world, which is reducing the gap between conventional and organic bananas. Meanwhile, alternative adjectives such as natural and ecological can serve to confuse even the most wellinformed consumers. Peru was once unknown in the organic sector, but has, in the space of just four years, become one of the largest producers and exporters of organic bananas in the whole world. Nevertheless, the country must bear in mind one important truism: getting there is only half the battle. _ E

Demand for organic products is booming amid growing concerns about traceability and food safety

october 2011 - eurofruit magazine

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