Global cost increases: building a fair and sustainable banana value chain together (Afruibana)

As we enter the period of contractualization of our commitments for the following year with mass distribution, we, African producers, wish to draw the attention of stakeholders to the cost increases experienced by the global banana sector and our continent in particular.

First of all, our maritime transport costs, affected by the current sectoral situation, are expected to increase by more than 60% in 2022. Similarly, under the effects of the increase in production factors and the slowdown in supply chains, we anticipate an increase in our purchasing costs of around 20 to 25% depending on the products (cartons, fertilizers, phytosanitary products, etc.). In addition, for those of our producers who have not yet achieved it, the implementation of the Global Living Wage Coalition’s “living wage” will require additional efforts, despite a methodology that does not even take into account the many health, education or housing services already offered to our teams. Finally, given the outlook for the global economy and its effects on parities, we expect our operating costs to increase by an additional 3 to 5%.

However, it should be noted that these cost increases have not yet translated into higher banana prices. On the contrary, 2021 will remain a very difficult year for the market, with the price of an 18.5 kg box even temporarily falling below €10 according to the CIRAD Observatory. These low levels come at the end of a long and deep degradation of purchase prices that producers have had to face alone year after year.

In this context, we are counting on the commitment of our European partners in the retail sector to make the banana value chain fairer and more sustainable. Indeed, only fair selling prices can allow a fair distribution of the value between the actors of our chain. These fair prices are also the key to initiate the essential investments in the ecological and energy transition of our sector during this decade.

Each actor in our chain, from the producer to the final buyer and the consumer, must responsibly “do their part” and contribute to the positive evolution of our sector. It is in this spirit that we wish to prepare the coming year with our partners in the retail sector and, with them, ensure that in 2022 and beyond the chain that links our 30,000 employees to millions of European consumers will be increasingly fair and resolutely sustainable.

Signatory members:

Hon. Joseph Owona Kono, President of AFRUIBANA and Executive Secretary of ASSOBACAM (Cameroon)
Minister Jean-Marie Kakou-Gervais, Vice President of AFRUIBANA and President of OBAMCI (Ivory Coast)
Mr. Elloh Vosso, President of OCAB (Ivory Coast)
Mr. Anthony Blay, Vice President of AFRUIBANA and President of BPA (Ghana)