US banana exporter Chiquita has been accused by Costa Rica of breaking a minimum price agreement of US$5.25 a box made by the government earlier this year.
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The Costa Rican trade minister Tomas Duenas explained that Chiquita has dropped its price to just US$4.50 this month, while the other US exporters Del Monte and Dole are paying US$5.20 a box. After meeting with Chiquita on Monday, Duenas maintained that the company should pass on some of its profits to the banana producers, and has not ruled out legal action.
He told the Financial Times: “Two companies are respecting the decree. Chiquita is not. It does not seem logical that Chiquita should lower its prices when it is benefiting from the new regime. We would like them to be a good corporate citizen.
“We do not want to see the producer, who takes much of the risk, being squeezed.”
Chiquita has denied the charge and the company’s vice president in Costa Rica, Enrique Vazquez, stressed that the contracts signed with local producers were very complicated. With regard to future prices, Vazquez added, “nothing can be predicated in this business.”
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By GlobalDataLast week, new import rules were implemented by the European Union that should see Chiquita’s sale lift substantially. From 1 July, Chiquita was re-issued import licences it lost in 1992, and from next January the company will be able to import increased quotas of Latin American fruit.
Duenas slammed the EU rule, which he claims “leans towards the big commercialisers”. The majority of Costa Rica’s banana crop is exported by the three US companies, despite that around 50% of it is produced by small independent farmers. “The guys who are really winning are the middle-men,” he added.
