Banana Prices Down in Europe, Up In North America

NEW YORK - Jun 13/06 - SNS -- Chiquita Brands International, Inc. reports the average price of bananas declined in Europe in April and May, while rising in North America.

In the European Union, Switzerland, Norway and Iceland, Chiquita's average banana prices declined 10% on a local currency basis (down 13% on a U.S. dollar basis) in the first two months of the 2006 second quarter, compared to the same period a year ago.

The company attributed the lower average European prices in 2006 to the impact of regulatory changes in the market that have encouraged certain new competitors to enter the market, causing pronounced year-over-year declines at the low end of the price spectrum.

In addition, April-May 2005 pricing had been particularly robust, up 19% on a local currency basis (up 28% on a U.S. dollar basis) versus April-May 2004, making year-over-year comparisons in 2006 more challenging.

In January 2006, the European Commission implemented a new regulation for the importation of bananas into the European Union. It imposes a tariff rate of euro 176 per metric ton (euro 3.19 per box) on bananas imported from Latin America, up from euro 75 per metric ton (euro 1.36 per box) under the former regime, and eliminates the quota that had previously applied to Latin American banana imports.

The volume of bananas the company sold in its core European markets fell 2% overall in the April-May 2006 period; while volume declined 5% in April, it rose 2% in May. The company attributed to overall volume decrease primarily to a strategic focus on selling premium-quality fruit: the company sold 3% more premium Chiquita-label bananas and 30% less lower-margin second-label fruit during the period versus the same two months in 2005.

Subscribers can read the full text of the article by Clicking here