Following an advisory last month from the Panama Canal authority warning that with 41 percent less rainfall than usual this winter and in the upcoming summer months, the next few months will see fewer vessels passing through the waterway, banana growers and shippers are keeping watch on the situation. “This will definitely impact produce shipments coming from South America,” says Mayra Velazquez de León, President and CEO of Organics Unlimited. “We’ve seen this happen before. It’s not only the water levels, but the shipping companies’ logistics that affect the incoming produce with delays. This affects the industry by disrupting the supply chain of produce across the board.”
Velazquez de León says in its case, Organics Unlimited is managing its logistics in a way that it will have incoming shipments from Ecuador and at the same time, will move quickly to fill in the gaps by harvesting Mexican fruit which has a four-day turnaround.
On organic bananas, supply will start slowing down in the next month though yield numbers are good. “We are currently growing organic bananas in Mexico and Ecuador and both have different seasonalities and with climate change, production has reacted differently,” says Velazquez de León. Add to that it being an El Nino this year which brings warmer temperatures and increased rainfall in some regions and droughts in others. ”Monitoring these events is crucial to understanding what our supply is going to be like.”
Slower seasonal demand
Meanwhile demand for bananas is slower right now which typically happens between Thanksgiving and the end of the year when consumers focus on other seasonal items. However, it strongly picks up at the end of the year to keep the market strong when the supply goes down in January.
As for pricing, given bananas are largely purchased on a contract basis making for stable pricing year-round, Velazquez de León says there is still consistent pressure from larger retail players to maintain unrealistic prices. “While the cost increases are not as large as they were last year and the year before when the supply chain crisis struck, just as costs for all of us are increasing in our day-to-day lives, so are costs increasing for growers and their inputs,” she says, adding that this is also the time of year when contract negotiations are underway for the next year.
For more information:
Mayra Velazquez de León
Organics Unlimited
Tel: (+1) 619-710-0658
[email protected]
www.organicsunlimited.com