28 terms

The Banana Trade- World trade in a food commodity

Bananas require
Moist soil with good drainage and are grown in tropical regions with average temperatures of 27°C and annual rainfall of 2000-2500 mm
Environmental impact of banana cultivation
Agrochemical input, commercial plantations operated by large TNCs apply around 30kg of active ingredients per hectare, per year. Including fungicides, insecticides and herbicides. Also, after harvesting, fruit is washed with disinfectant.
Environmental costs
1. deforestation 2. waste (for every tonne of bananas produced there are two tonnes of waste) 3. soil fertility 4. loss of biodiversity
cultivation of a single crop, usually in a large area, majority of bananas for export are grown on these types of plantations
The quantity of bananas eaten by every UK resident a year - about 100 bananas!
400 million
The number of people who rely on Bananas for their staple food
Largest exporters of bananas
Ecuador: US$3 billion (24.6% of total banana exports), Belgium: $1.1 billion (8.5% - all RE-exports),Costa Rica: $1 billion (8.4%), Colombia: $918.1 million (7.4%)
The banana is the 5th most traded agricultural commodity
Value of banana exports in 2017
India, China and the Philippines
Largest producers of Bananas
Amount of banana exports from Latin America and the Caribbean produce
Largest importers
EU and USA (consumed 27% each in 2013)
See only a fraction of the end price of a banana
Chiquita, Dole, Del Monte, Fyffes
In the past 80% of banana trade was dominated by these 4 TNCs
Economies of scale
How TNCs maximise profits from bananas - they own or contract out plantations, have their own sea transport, ripening facilities and distribution networks
Share of the market dominated by big TNCs dominated in 2002
Banana trade war
1992-2009;one of longest trade disputes in history between the EU countries and large US owned banana TNCs
Lome convention
1975 Trade agreement between EU countries and 71 African, Caribbean and Pacific countries who are former European Colonies. They were given special and differential treatment with preferential tariffs- free import quotas to supply the EU market
Lome Convention aimed to
Help poorer countries to develop independently without having overseas aid
The percentage of the EU market provided for by big US TNCs at the time of the Lome convention
The percentage of the EU market Caribbean suppliers supplied at the time of the Lome convention,
TNCs file a complaint to WTO that EU practice on bananas was unfair
When the WTO ruled against the EU and stop the Lome convention
Under pressure from TNCs - imposed WTO approved sanctions on EU products
Geneva Agreement
2009 compromise between EU and American countries - agreed to gradually reduce tariffs on Latin American Bananas
Geneva Agreement ratified
Race to the bottom
Many larger companies are relocating plantations to West Africa where the labor costs are cheap and the legislation is cheap. The work involves long shifts in unbearable heat and many workers fail to earn enough to cover their basic needs
More ethical and sustainable market that is growing in richer countries where people can afford to pay a higher price for bananas