lecture 12 case study - bananas -...

Lecture 12-

Case Study - Bananas

UGSCCS – Autumn 2013

Section 1 Banana Supply Chain

Section 2 India Case Study

CASE STUDY - BANANAS

LECTURE STRUCTURE

Grown in over 150 countriesMajor staple food commodity

Over 105 million tonnes produced per yearDesert bananasCooking bananas (plantains)Fiber bananas (hemp)

BANANA SUPPLY CHAIN

BANANAS - TERMINOLOGY

Major staple commodity16.8 million tons exported (2006)Valued at $5.8 billion (2006)

98% of world production is grown in developing countries and exported to developed countries

10 countries accounted for >75% of total banana production (2007)India, China, the Philippines, Brazil and Ecuador produced > 60% Asia has overtaken the Americas in terms of volume of production

BANANA SUPPLY CHAIN

BANANA PRODUCTION

Banana Production by Country 2003 - 2007

Source: UNCTAD

Latin America and the Caribbean supplied about 70% of world exports in 2006Ecuador, Costa Rica, Philippines and Colombia accounted for 64% of world exportsEcuador alone provided more than 30% of global banana exports

High levels of economic dependence on bananas (total value of exports)Ecuador 9.3%Costa Rica 7.7% Saint Vincent and the Grenadines: 22.3%Saint Lucia: 19.7%Dominica: 18.1%

BANANA SUPPLY CHAIN

BANANA EXPORTS

Banana Exports by Country 2002 - 2006

Source: UNCTAD

BANANA SUPPLY CHAIN

BANANA EXPORTS (2011)

Source: http://faostat.fao.org/site/342/default.aspx

BANANA SUPPLY CHAIN

BANANA EXPORTS (2011)

Rank AreaQuantity (tonnes)

Value(1000 $)

Unit value ($/tonne)

1 Ecuador 5778170 2246351 389

2 Philippines 2046743 471152 230

3 Costa Rica 1913808 719445 376

4 Colombia 1828281 775275 424

5 Guatemala 1425584 435484 305

6 Belgium 1272098 1294403 1018

7 United States of America 516119 437017 847

8 Honduras 489029 397778 813

9 Germany 366895 388278 1058

10 Dominican Republic 330111 269645 817

11 Côte d'Ivoire 320101 133911 418

12 Panama 263522 86339 328

13 France 252872 187094 740

14 Cameroon 237275 88672 374

15 Mexico 179838 75803 422

16 Netherlands 173183 170718 986

17 Brazil 110054 39248 357

18 Bolivia 108095 21598 200

19 Yemen 91032 16084 177

20 Thailand 74560 42375 568


Banana imports are relatively concentratedEuropean Union, the United States of America and Japan, account for >70% of world total imports in 2006

Export-Import trades are highly focused

BANANA SUPPLY CHAIN

BANANA IMPORTS

Banana Imports by Country 2002 - 2006

Source: UNCTAD

BANANA SUPPLY CHAIN

BANANA IMPORTS (2011)


BANANA SUPPLY CHAIN

BANANA IMPORTS (2011)


Rank AreaQuantity (tonnes)

Value(1000 $)


1 United States of America 4122683 2161339 524

2 Belgium 1340044 1570223 1172

3 Russian Federation 1306794 948092 726

4 Germany 1288293 979249 760

5 Japan 1064125 902868 848

6 United Kingdom 1019227 796800 782

7 China, mainland 818675 401728 491

8 Italy 661937 544168 822

9 Iran (Islamic Republic of) 615879 409672 665

10 France 567207 443164 781

11 Canada 506431 388056 766

12 Argentina 394881 143694 364

13 Chile 380692 54856 144

14 Republic of Korea 352671 220969 627

15 Saudi Arabia 306173 174584 570

16 Netherlands 296899 200344 675

17 Ukraine 247825 152617 616

18 Algeria 245285 188835 770

19 Turkey 234632 110435 471

20 Poland 222846 172580 774

BANANA SUPPLY CHAIN

BANANA IMPORTS – REGION SPECIFIC

EU Imports 1990 - 2007 US Imports 1990 - 2007

Japanese Imports 1990 - 2007

BANANA SUPPLY CHAIN

UK BANANA IMPORTERS

BANANA SUPPLY CHAIN

KEY PLAYERS

Growth in organic and fair trade markets (1998 – 2003) tonnes

BANANA SUPPLY CHAIN

FAIR TRADE & ORGANIC MARKET

Source: http://www.unctad.info/en/Infocomm/Agricultural_Products/Banana/Market/Growth-of-Organic-and-Fair-Trade-Banana-Markets/#

BANANA SUPPLY CHAIN

BANANA COLD CHAIN

BANANA SUPPLY CHAIN

MARKET STRUCTURE

BANANA SUPPLY CHAIN

BANANA PRODUCTION

Caribbean Countries Latin American Countries

Growing areas hilly or mountainous. Limited land availability

Large flat plains. Wide land availability

Poor soil conditions and low yields (not more than 10 tonnes/acre)

Rich soil and high yields (18-24 tonnes/acre)

Majority are independent, small farmers Largely a plantation agriculture, often owned by transnationals and vertically integrated operations

Higher wages than in Latin America Wage rates low, social conditions of workers poor

Unit cost of inputs much higher due to smaller volumes and varying soil types

Lower unit cost of inputs due to high volume. Lower FOB price due to lower market wages, low social benefits and economies of scale

Shipping costs generally higher: smaller volumes, more port calls

Lower shipping costs due to high volumes

Labour intensiveClearing jungle growthSupporting weight of growing fruitIrrigation

Polyethylene bags protect againstWindInsects and birdsMaintain optimum temperatures, creating a micro-climate.

Vulnerable to pests and diseases pesticides and fungicides

BANANA SUPPLY CHAIN

PROTECTING GROWING BANANAS

BANANA SUPPLY CHAIN

PREPARING FOR EXPORT

Polypack

Thin polyethylenePermeable to oxygen, carbon dioxide and ethylene

Reduces moisture lossCan maintain banana green-life for up to about 28 daysIf voyage delayed

High risk of premature ripening aboard ship

Banavac

Thicker polyethyleneLess permeabilityCreates a slightly modified atmosphere

Can keep bananas green 40 - 50 daysDisadvantageBag must be punctured prior to ripening

Allow ingress of ethylene

BANANA SUPPLY CHAIN


Cartons are perforatedTo ensure a proper flow of cooling air around the bananas

Openings in the outer and inner closing flaps of the lid and base partEnsure that a vertical stream of air may pass through the bananas unhindered

BANANA SUPPLY CHAIN


One third by using refrigerated containers20-foot container can hold about 48,000 bananas

Two thirds specialised reefer shipsChilled to delay ripening processRegular weekly / bi-weekly services depending on volumes

BANANA SUPPLY CHAIN

TRANSPORT OF BANANAS

BANANA SUPPLY CHAIN

BANANA SUPPLY CHAIN - BARGES

BANANA SUPPLY CHAIN

BANANA SUPPLY CHAIN – REEFER SHIP

BANANA SUPPLY CHAIN

POOR REFRIGERATION

BANANA SUPPLY CHAIN

BANANA SUPPLY CHAIN - CONTAINERS

BANANA SUPPLY CHAIN

IMPORT CHECKS – QUALITY CONTROL

BANANA SUPPLY CHAIN

DAMAGE – EARLY RIPENING

1. Cartons at a pulp temp 14oC loaded into ripening room

2. Room heated for 12-16 hours until pulp temp of 15-17oC

3. Ethylene added to room 24 hours4. Room is ventilated5. Atmosphere -17oC reducing to 15oC over

3 or 4 days6. Room finally ventilated and the ripe fruit

removed

BANANA SUPPLY CHAIN

RIPENING BANANAS

BANANA SUPPLY CHAIN

RIPENING ROOM

BANANA SUPPLY CHAIN

KNOWING THE TRADE.....

BreatheWayExtend shelf life by regulating oxygen and carbon dioxide levels

PerftechExtends shelf life by 3-4 daysBanana respiration creates a modified atmosphere which slows down maturation

Packaging has micro-perforationsCan be packaged in bags at origin

Ripened as normal at destination

BANANA SUPPLY CHAIN

RETAIL PACKAGING TECHNOLOGY

BANANA SUPPLY CHAIN

WHAT ABOUT KOREA?

Rank CommodityQuantity (tonnes)

Value (1000 $)


4 Pork 487,017 1,294,225 2,657

6 Meat-CattleBoneless(Beef&Veal) 188,351 943,097 5,007

12 Cattle meat 119,262 426,702 3,578

15 Cheese of Whole Cow Milk 71,543 294,552 4,117

20 Bananas 352,671 220,969 627


Section 1 Banana Supply Chain

Section 2 India Case Study

CASE STUDY – BANANAS

LECTURE STRUCTURE

India is the world’s biggest producer of bananas

Exports <1%Potential to export 25 million tonnes

INDIA CASE STUDY

INDIAN EXPORT OF BANANAS

40% of India’s fruits and vegetables go to waste during domestic transport

Poor infrastructureLack of effective cold chain

INDIA CASE STUDY


Allow bananas to be transported reliably and affordably for up to 45-50 daysAdvanced technology

Regulates temperature, humidity levelsMaintains ideal atmospheric conditions inside the container

Delay the ripening process and extending the bananas’ shelf-lifeEliminates need for Banavac bags

Saves customers time and money

INDIA CASE STUDY

SPECIALISED REEFER CONTAINERS

Refrigerated containers allow smallholder Indian farmers to

Distribute smaller volumesAccess export markets and higher pricesReduced waste in transit

From 30-40% to less than 2%

INDIA CASE STUDY


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