The wholesale price of bananas hit a record high in the first quarter but retailers are reluctant to pass on the costs to customers.
Prices have increased as a result of limited supplies in Central and South America, which account for 85% of world’s banana exports.
A weather phenomenon known as La Niña has been behind the banana shortages, with disrupted weather patterns, causing cooler months and heavy rain in banana growing regions.
The production of bananas has also been affected by a strike among banana-plantation workers at the start of the year, which lasted several weeks.
As a result, growing schedules and harvesting of the fruit have been delayed.
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By GlobalDataThe wholesale price of bananas in the US increased by 15.5% in the first two months of 2018 to $0.577 a pound, an all-time high, according to World Bank.
The price of bananas fell in March as supplies in the US improved but are still 8.4% higher than last year.
Retailers are reluctant to pass on the cost of the beloved fruit onto customers, as for many retailers bananas drive footfall, as most people would rather pick up bananas themselves than order them online.
Most large retailers sell the fruit at a slim margin or even no price markup, which hurt returns for sellers that have not locked in prices with long-term contracts.
Tops Friendly Markets director of produce and floral Jeff Cady said: “I go to competitors regularly, and no one has moved on retail prices”
Talking about bananas prices he said ‘I’d love to go up, but we just can’t’.
Cady also said that due to limited supplies Tops was forced to ship bananas from its warehouses that had been ripening for four days, instead of the usual 5 days.
According to banana producers, Americans eat more bananas during colder months as many other fruits are less available and more expensive.
According to the US Department of Agriculture, on average, Americans consume 11.4 pounds of bananas each year, coming above oranges and apples.
According to USDA, in late-February and mid-March, average retail prices of bananas in the US have reached $0.57 a pound, highest since December 2016
Prices this year have increased by 2.3% this year, remaining relative to wholesale prices.
SweetFrog chief executive Patrick Galleher said he had noticed about an 8% increase in the wholesale price of the thousands of bananas he has to buy to stock his 350 stores across the US.
According to Chiquita Brands International Inc. manager of innovation Frederic Verbord, the tropical temperatures have normalised now and the supply and demand should be back in balance soon.
Bananas are also under threat of extinction from a fungal disease affecting plantations but plantations in Central and South America currently remain free of the disease.
