Banana prices bend up as cyclone shortage hits

WOULD you pay $3 for a banana?

By InvestSMART · 8 Mar 2011

By InvestSMART ·
8 Mar 2011

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WOULD you pay $3 for a banana?

Depending on where you buy your fruit and veg, you might encounter such prices over the next six months, as cyclone Yasi's annihilation of Queensland's banana crop on February 3 finally hits Victorian shoppers where it hurts too.

Several greengrocers surveyed by The Age reported a spike yesterday in the wholesale cost of bananas, leading them to significantly increase their prices.

"This morning I paid $100 for 13 kilos of extra-large bananas . . . this time of year it should be around the $20 mark," said Robert Russo, owner of Frootz on Parade in Fitzroy North, where the fruit bowl staple was on sale for between $8.99 and $10.99 a kilogram.

Wholesaler and grocer La Manna Fresh in Brunswick also felt the pinch at Footscray's wholesale market yesterday morning, with supply much "tighter" than last week, according to trader Cosimo Patti, who had just raised his prices from $3.99 to $5.99 a kilo.

Coles supermarket in Spencer Street was selling bananas at $6.98 a kilogram yesterday, while upmarket grocer Pino's at Prahran Market, which buys its fruit from La Manna, was selling its best bananas for an ambitious $3 to $4 each. Trader John Narduzzo said he was paying $6 a kilogram for high-quality bananas, such was their scarcity, and he expected the situation to deteriorate.

"It'll get worse. They'll hit more than $100 per box at the wholesale market," Mr Narduzzo said.

Cyclone Yasi destroyed 95 per cent of banana plantations around the northern Queensland towns of Innisfail and Tully, where three-quarters of Australia's bananas are grown.

But the impact on the nation's stocks has been less severe than it was after cyclone Larry, which tore through the same district five years ago, because most growers were better prepared.

Large quantities of fruit were taken off the trees and placed in storage in "a mad dash" just before the cyclone hit, Australian Banana Growers Council chief executive Jonathan Eccles said. It is only now that these stores are exhausted, and prices are skyrocketing, although prices of $15 a kilogram will not become commonplace, as after Larry.

The banana drought is tipped to end by mid-spring.

In the meantime, shoppers are being advised not to shirk imperfect fruit.

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Frequently Asked Questions about this Article…

Why have banana prices jumped in Australia after Cyclone Yasi?

Cyclone Yasi destroyed much of the Queensland banana crop, wiping out about 95% of plantations around Innisfail and Tully — regions that grow around three-quarters of Australia's bananas. With stored fruit now exhausted, wholesalers have faced tighter supply and pushed up prices, which retailers have passed on to shoppers.

How badly did Cyclone Yasi affect banana production in Queensland?

The cyclone severely hit northern Queensland on February 3, destroying an estimated 95% of banana plantations around Innisfail and Tully. Those districts supply roughly three-quarters of the nation's bananas, so the damage caused a significant national supply shock.

How much have wholesale and retail banana prices increased?

Price rises have been dramatic at the wholesale and retail level. Examples from the article include a greengrocer paying $100 for 13 kg of extra-large bananas (normally about $20 at this time of year), La Manna Fresh raising prices from $3.99 to $5.99 per kg, Coles selling at $6.98 per kg, and specialty grocers charging $3–$4 per banana. Traders warned wholesale boxes could top $100.

Which greengrocers and supermarkets are reporting higher banana prices?

The article cites Frootz on Parade in Fitzroy North, wholesaler La Manna Fresh in Brunswick, Coles supermarket on Spencer Street, and Pino's at Prahran Market as examples of businesses facing higher banana costs and passing those on to customers.

Are these high banana prices likely to be temporary or long-lasting?

According to the article, the banana drought is tipped to end by mid‑spring. Growers had stored fruit ahead of the cyclone, which has helped soften the impact compared with past events, but those reserves are now exhausted, so elevated prices are expected for several months.

Will banana prices reach the extreme levels seen after Cyclone Larry?

The article says the impact from Yasi has been less severe than after Cyclone Larry because growers were better prepared and stored fruit in advance. While prices are skyrocketing, Australian Banana Growers Council leaders do not expect $15 per kilogram to become commonplace as it did after Larry.

What is happening at the wholesale banana market right now?

Wholesalers at markets such as Footscray report much tighter supply than a week earlier, leading traders to raise prices. Several traders warned of box prices going above $100 as scarcity pushes up wholesale costs before they reach retailers.

How can shoppers cope with higher banana prices during the shortage?

The article notes shoppers are being advised not to shirk imperfect fruit, implying that choosing slightly blemished or non-standard bananas can be a cost-saving option while supply is tight and prices are elevated.