Why cheap bananas may be a thing of the past
Bananas have long been the North American grocery aisle’s greatest paradox: a tropical fruit that travels thousands of miles by refrigerated ship, yet somehow costs less per pound than a locally grown apple.
But according to Fairtrade International, the razor-thin margins keeping bananas cheap are about to snap.
While Fairtrade’s October 2025 Minimum Prices built in a safety cushion for normal market fluctuations, prolonged geopolitical tensions and stubborn post-pandemic input costs are pushing growers to the brink.
"If the Middle East conflict continues and has a significant impact on inputs, these minimum prices may be exceeded. Therefore, it is important that we monitor the situation frequently," Fairtrade Senior Advisor Silvia Campos told FreshFruitPortal.com.
A banana split between costs and prices
Campos said some petroleum-based input costs could decline if tensions in the Middle East ease, but there’s little certainty.
Take fertilizer prices, for example, which climbed to record levels in 2022 and even doubled in some cases, according to the World Bank. Although prices later eased, many remained above pre-pandemic levels, continuing to pressure agricultural producers worldwide.
"Companies, unfortunately, take advantage of the situation—input prices may drop but never return to previous levels,” she explained.
Her assessment aligns with broader concerns across the North American banana industry about the widening gap between production costs and retail pricing. According to industry outlet The Produce News, many American retailers continue to use bananas as a loss leader despite decades of inflation and rising production expenses.
Tom Stenzel, managing director for the Banana Association of North America, told the publication that higher fertilizer costs, ocean freight, fuel expenses, disease pressure, and extreme weather have increased financial stress throughout the supply chain while retail prices have remained comparatively low.
"Currently, producers and traders are carrying most of the burden of higher costs, with importers responsible for paying surcharges per container due to higher fuel prices. Fairtrade continues to call for shared responsibility, encouraging commercial partners to do their part when it comes to supporting small-scale producers through this crisis," Campos added.
Pressure grows from field to checkout
Campos said the Dominican Republic and Peru face the greatest financial pressure because their economies are not dollarized. She said exchange-rate practices by suppliers, fuel-intensive irrigation systems, and relatively low productivity have compounded rising costs.
"In these countries, companies selling inputs and services manipulate exchange rates, billing in local currency when issues arise and switching to USD when it suits them,” she said.
Furthermore, Campos explained that these markets rely on irrigation systems powered by inefficient machinery, meaning the price of petroleum derivatives heavily impacts their fixed costs.
Colombia, the world’s fifth-largest banana exporter, faces an even more complex scenario, she noted.
“They saw a 23 percent increase in the statutory minimum wage decreed this year, and the currency has appreciated by 15 percent since the last Fairtrade Minimum Price was approved in October 2025,” Campos explained. “Unlike the other origins, their productivity and labor efficiency allow them to keep the impact of these additional cost increases moderate.”
Looking ahead, Campos said the Fairtrade banana sector faces the risk of declining sales volumes if supply chain partners do not share rising costs. She also warned that adverse weather could worsen conditions.
"The ongoing impacts of the El Niño phenomenon, which means extreme weather conditions such as droughts and flooding, continue to put additional pressure on production, threatening the long-term viability of banana production, particularly for small-scale farmers," she concluded.
*All images are referential.
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