Hi! Thanks for the very interesting question.
Banana prices fluctuate because it is highly integrated with the
different sectors such as pesticides, packaging, shipping, etc.
"In the case of bananas, these sectors include fertiliser, pesticides,
cartons and packaging materials, farm machinery, shipping, etc.
Tertiary effects are those borne by the sectors from which banana
workers buy goods and services. These sectors encompass most of the
economy, but prominently include housing, clothing, food, medical
services, education, etc."
Our next link which is a forecast of the worldwide banana market
provides other factors as well which are sometimes beyond the control
of ordinary producers. It also provides a good discussion on the price
dynamics in the world banana market.
"World net exports and imports of bananas are projected to balance by
2005 at about 13.7 million tonnes, including loss-in-transit volumes.
However, this balance would be attained only by a decline in real
prices as a result of a sharp decrease in import demand growth rates
and the lag in production adjustment in face of decreasing prices.
This situation reflects the fact that while banana trade is
demand-driven, production responds differently to rising prices as
compared to declining prices. Thus, a price rise in one period results
in a long run increase in production based on increased investment,
while reduced prices do not curtail supply to the same degree. Other
reasons why supply may not adjust quickly to changes in real prices
include government policies isolating producers from world prices and
higher prices enjoyed by producers with access to some protected
markets."
"This declining price scenario could be modified to some degree by
other events including storms and hurricanes, as well as other adverse
weather phenomena, changes in energy costs, which affect input usage
and productivity, and returns on alternative tropical crops. In the
particular case of bananas, an increase in imports by China or
recovery in consumption in the area
of the former USSR would alter the price situation significantly, as
may changes in trade policies by major importers. Also, should there
be more rapid economic growth than that assumed for this projections
exercise, demand for bananas could strengthen thereby supporting
higher price levels."
"PROJECTIONS FOR SUPPLY AND DEMAND OF BANANAS TO 2005"
ftp://ext-ftp.fao.org/waicent/pub/ccp/bntf99/X1065e.pdf
One major reason for the fluctuation is also given by this link which
shows that the banana market is controlled by a few large
corporations.
"The banana market, like plenty of other industries, is mainly
controlled by a small number of large corporations. Most bananas are
grown on huge plantations, controlled by these corporate giants. Only
13% of banana production is not controlled by big business, but by
small banana producers."
"The Case of the Banana"
http://www.fairtradetoronto.com/banana.htm
Search terms used:
banana "world prices"
I hope these links would help you in your research. Before rating this
answer, please ask for a clarification if you have a question or if
you would need further information.
Thanks for visiting us.
Regards,
Easterangel-ga
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