Expanded EU promises new mart for bananas

The expansion of the European Union from 15 to 25 countries in May 2004 could signal the promise of lucrative new markets for banana producers. This was according to the United Nations Food and Agriculture Organization (FAO).

"One of the most coveted emerging markets for banana producers is that of the 10 new countries that will join the Single European Market in May," said Paul Pilkauskas, FAO senior commodity specialist. Pilkauskas' comments came as the Third Session of the Intergovernmental Group on Bananas and Tropical Fruits opened in Puerto de la Cruz, Canary Islands, Spain.

In the coming weeks, the Union will decide how the transitional tariff-quota system will be applied to banana imports between 2004 and 2006. Beginning in January 2006, a tariff-only system will be established. According to the FAO, these two decisions will have a significant impact on producer countries, because currently one third of the world banana trade is destined for the European Union.

"The meeting of the Intergovernmental Group will be a good opportunity to discuss these issues before the European Union takes a final decision," said Pilkauskas.

Currently, the sector faces a number of challenges, including overproduction and the shape of the new market that will be created by the new Europe of the 25 countries.

Bananas are the fifth most important commodity for world food security. Worldwide, more than 88 million tons of bananas are produced every year. A substantial part of this production is consumed locally, especially in tropical countries, where bananas are a staple food.

The banana sector is strongly export oriented, with some 13 million tons crossing the seas and oceans each year. Oversupply relative to demand is a continuing issue and the future of the sector is less than clear in the evolving world agriculture trade system.