A new report by RaboResearch highlights the growing impact of climate change on banana supplies to the EU and the US. Fluctuations in yields, rising water demand, extreme weather conditions, and increasing disease pressure pose significant risks to the supply chain. As the EU and US are heavily dependent on a small number of South American countries, competition is intensifying, and these risks are becoming more pronounced. Camila Bonilla-Cedrez, Specialist F&A Climate & Sustainability, explains why everyone in the supply chain—farmers, importers, and supermarkets—needs to take action.
Dependence on South American suppliers
Bananas are the most consumed fruit worldwide, but the US and EU do not produce them domestically. Bonilla-Cedrez explains: "These regions are completely dependent on imports. Most bananas in these markets come from South America. For example, 73% of EU imports come from Ecuador, Colombia, and Costa Rica, while Guatemala, Ecuador, and Costa Rica together account for 76% of US banana imports."
Climate change is ongoing, risks are increasing, and market prices are not adequately reflecting the rising costs and risks, the analyst continues. "In countries like Colombia and Panama, we are already seeing declining yields, and disease pressure is increasing across the region. So it's worth questioning whether it's wise to rely so heavily on such a small number of countries for such a large share of European and US imports."
Climate change impact varies by region
Bananas thrive in tropical climates with stable temperatures and adequate water. Climate change is altering these conditions, affecting yields in various ways. This occurs both directly, by disrupting the banana-growing environment, and indirectly, by increasing disease pressure. Additionally, shifting temperature and rainfall patterns could cause banana cultivation to move to new areas, while existing growing regions may become unsuitable. Although good crop management can mitigate some of the effects of climate change, it remains a significant challenge.
Global banana yield may decline by 2050
In recent decades, many banana-producing countries have seen yield increases due to climate change. In some regions, global warming has actually created more favorable growing conditions, according to the analyst. However, by 2050, banana yields are expected to decline in certain countries, such as India and Brazil. Colombia and Costa Rica should also prepare for this possibility. For African producers, such as those in Belize and Ecuador, climate change could lead to higher yields and improved conditions.
Impact on fruit quality
Climate change affects not only the quantity of bananas that can be grown but also their quality. High temperatures and extreme rainfall can influence fruit characteristics such as weight, firmness, and color, leading to increased post-harvest losses.
Diverse supply is essential
Without proactive measures, banana supplies in the US and EU could come under pressure. While Ecuador and the Dominican Republic may continue to be stable suppliers, reliance on a limited number of countries increases competition and risks. If shortages arise in other markets, demand for Ecuadorian bananas may rise sharply, potentially leading to contract breaches and supply chain disruptions.
Working together for climate resilience
Farmers, importers, and governments can collaborate to build a more resilient banana sector. Farmers are adopting climate-resilient practices to manage pests and diseases, improve fruit size, and enhance overall crop health. With increasingly unpredictable rainfall patterns, effective water management is becoming essential.
"Importers and retailers, in turn, need to reassess their sourcing strategies to safeguard future supplies," Bonilla-Cedrez explains. "By also sourcing from African and other South American countries, we can reduce risks and promote investment in alternative production systems."
Investing in climate-resilient agriculture
A robust and sustainable banana industry requires shifts in sourcing strategies and investment in climate-resilient agricultural practices. Currently, farmers lack the margins to effectively adapt to the changing climate without support from buyers, governments, and development organizations. This means that banana prices will ultimately need to rise.
Source: Rabobank