Global Market Report: Banana prices and sustainability

This report presents and analyzes sustainable production and consumption trends in the global banana industry. It examines how voluntary sustainability standards and other supply chain actors can support banana producers to adopt more sustainable practices and ensure they are rewarded fairly for their efforts, so they do not bear the burden of global price fluctuations and increased production costs.

By Vivek Voora, Steffany Bermúdez, Johanna Joy Farrell, Cristina Larrea, Erika Luna on March 20, 2023
  • VSS-compliant bananas represented at least 9% of total global production of bananas in 2019, growing at a compound annual growth rate of 32%–35% between 2008 and 2019. But this growth looks to be slowing.

  • Bananas are one of the cheapest fruits in stores. VSS-compliant banana farmers struggle to compete with conventional bananas maintained at artificially low prices.

  • Banana producers in major exporting countries who are associated with at least one VSS can receive between 60% and 100% higher prices than those selling conventional bananas.

Bananas are believed to be the first cultivated fruit and are currently the world’s most consumed and exported fruit. Along with plantains, they are the fourth most important staple crop globally, helping to maintain food and nutritional security for 400 million people in producing countries.

But banana supply chains are very vulnerable to disruptions in the global economy, such as those caused by the COVID-19 pandemic, the Russia-Ukraine conflict, and variations in fossil fuel prices. Producers also face increasing environmental challenges due to climate change. What’s more, very little genetic diversity on banana plantations puts them at particular risk of pests and diseases, which can be exacerbated during extreme weather. For example, Tropical Race 4 is a deadly fungus found in soils that poses a threat to banana plantations and risks wiping out entire banana varieties.

Our research shows that banana producers are most affected by market disruptions. Recent crises have led to higher costs across all inputs in the banana supply chain, putting banana producers under increasing financial pressure.

However, voluntary sustainability standards (VSSs) such as GlobalG.A.P., the Rainforest Alliance, Fairtrade International, and Organic can help build producers’ resilience to such challenges in the banana sector. They are adopting measures to ensure banana farmers and workers are better remunerated, such as by setting minimum prices, paying premiums to cover the costs of sustainable production, and offering base wages to farmers. They are also supporting them in improving their resilience to climate change—for example, by requiring farmers to adopt soil preservation measures to maintain soil moisture and fertility, which can help the soil cope with periods of drought.

But responsibility for picking up the costs of more sustainable growing practices must be shared across industry actors at all levels of the banana supply chain. For example, retailers can play their part by committing to paying fairer prices for bananas and establishing long-term partnerships with producers. Governments can help improve producers’ knowledge of—and access to—sustainable growing practices and market prices. And regional networks and associations, such as worker unions, can advocate for higher prices for producers.