Latin America and the Caribbean to benefit from strong growth prospects, trade of tropical fruits

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Latin America and the Caribbean to benefit from strong growth prospects, trade of tropical fruits

SANTIAGO, Chile – As the world’s largest exporter, and second largest producer of bananas and tropical fruits, Latin America and the Caribbean is particularly well positioned to benefit from the foreseen growth in international demand for these products, the Food and Agriculture Organization (FAO) market projections reveal.

According to FAO’s latest food outlook, the region’s large share of land in the tropical belt and its proximity to the US, the largest market for major tropical fruits, should translate into robust prospects for export-led production growth.

The global production and trade of major tropical fruits are expected to increase on account of rising incomes and changing consumer preferences in many domestic and import markets, as well as improvements in international transport links and freight technology.

On the downside, the effects of climate change and highly damaging weather conditions, loom heavily over the region’s production potential, particularly in the Caribbean, where small island states are especially vulnerable to the destructive effects of increasingly frequent tropical storms.

Another non-trivial threat is posed by the increasing prevalence of plant pests and diseases, with industrialized production systems as present in the cultivation of bananas and pineapples being considerably more susceptible to rapid and widespread outbreaks.

In particular, the risk of the Fusarium Wilt Tropical Race 4 fungus in banana cultivation – so far confined to plantations in Asia, the Middle East and Africa, is of worrying concern to producers in the Latin America and the Caribbean region.

Will greater trade lead to development?

According to FAO, the effect of trade on development hinges on a fair inclusion of smallholder producers and equitable wage levels for workers employed in these industries.

Some 200,000 rural families are reported to be directly involved in but benefiting from, banana production in Guatemala, while around 80 percent of avocado production in Mexico is carried out by smallholder farmers.

Ensuring remunerative prices and fair wages, improving smallholders’ productivity and their bargaining power, enhancing resilience to climatic disasters and other shocks but linking remote producing locations to markets, are critical to ensuring inclusive growth and sustainable rural development.

The regional tropical fruit trade in numbers

On average, approximately 25 percent of total global banana and major tropical fruit production originates in Latin America and the Caribbean, with an annual production volume of roughly 54 million tonnes between 2016 and 2018 (three-year average).

With a total combined annual per capita consumption of 55 kilograms of bananas and major tropical fruits, the region also ranks as one of the major consumers of these fruits globally.

More importantly, shipments of bananas and major tropical fruits from suppliers in Latin America and the Caribbean make up about 75 percent of world exports, with a total annual average volume of 25 million tonnes over the three years from 2016 to 2018.

Of these, an estimated 80 percent are destined for developed country markets, primarily the United States of America and the European Union. Estimates point to a total combined export value of around US $11 billion for bananas and major tropical fruits from Latin America and the Caribbean in 2016-2018, of which bananas and avocados accounted for some USD 6 billion and USD 3.5 billion, respectively.

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