Because of inflation and increased costs of shipping, global certification group Fairtrade has announced a pending 20% average rise in banana prices to help farmers struggling financially.
A robust 15% will go toward offsetting the expenses being incurred by producers who export directly. The other 4.5% will go toward the rising costs at farms in general. They could increase further, Fairtrade said, depending on the global economy.
“We recognise many consumers, workers, and farmers are suffering from the current cost of living crisis. But the burden of carrying the increased costs cannot be shouldered by farmers alone,” said Silvia Campos, Fairtrade’s Senior Advisor for bananas.
Producers have been feeling the pinch of higher costs for more than a year, and they will absorb them for at least another few months as new pricing structures are being worked out between them and buyers. Those prices are expected to change on Jan. 1.
Among the realities facing producers are these numbers shared by Fairtrade:
- Fertilisers have soared by 70%
- Fuel costs have risen by 39%
- Pallets and plastic packaging have jumped by more than 20%
And other variables such as labour, carton boxes, inland freight and port charges, all have gone up, punctuated by delays and the friction on all markets from the Ukraine-Russia war.
Now more than ever, Fairtrade is asking the industry to support its workers and the new standards that are coming. The hope is that industry will embrace it and not turn away.
“We urge retailers, traders to stand by Fairtrade famers and workers, and continue to purchase Fairtrade bananas,” Campos said. “And we call on them to commit to shared responsibility and sustainable prices, to stop this continued race to the bottom and to ensure banana farms are able to stay in business.”