The world's banana market experienced difficulties during 2023 due to a shortage in global supply and logistical issues that affected distribution. However, demand was quite apathetic, especially in Europe. Thus, despite the shortage of supply, it was possible to manage the limited supply without major setbacks, according to the Peruvian firm Fresh Fruit.
In Peru, the low prices obtained in previous years reduced the producers' profitability to its bare minimum by the end of 2022. As a result, investment in the crop was expected to stop the following year, especially in the region of Piura, the country's main producer of bananas.
With lower product availability, the price started to improve in early 2023. However, this improvement was not enough to compensate for a serious problem: the arrival of the El Niño phenomenon, which seriously affected all crops, especially in the north of the country. Plantations around the Chira Valley suffered direct damage from heavy rains, as well as indirect damage from pests.
El Niño affected the quality of the bananas and prices continued to be insufficiently attractive in the international market. As a result, many exporters decided to redirect production to the domestic market, where margins were similar and the operation was simpler. In 2023, Peru exported 146,515 tons of fresh bananas worth US$112 million, i.e. 16% less volume and 8% less value than in the previous year. Despite this, the price improved to US$0.76 per kilogram, i.e. 9% more than in 2022.
At the end of the year, there was 'profound uncertainty' about the long-term future of Peruvian bananas, as their differentiation from other countries' bananas 'has decreased significantly.' Ecuador, for example, has increased its organic banana production, which is similar to Peruvian bananas, generating strong competitive pressure. Therefore, investments in this product are not expected to return soon, according to Fresh Fruit.
International dynamics
Europe continued to be the main destination for Peruvian bananas. Exports to the United States were affected, as the availability of bananas for this destination increased significantly, especially due to the growth of Ecuador's production. However, high demand in the United States allowed prices to remain relatively high.
Asia was also an important region for Peruvian bananas, with South Korea as the main destination.
Source: freshfruit.pe