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Tue 10 Nov 2009 06:11 AM

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Costa Rica aims to double Mideast banana exports

World's third largest banana exporter targets region for major business growth.

Costa Rica aims to double Mideast banana exports
IMPORTS INCREASE: Costa Rica is looking to double the amount of banana exports to the Middle East.

Costa Rica, the world's third-largest banana exporter, plans to double its exports to the Middle East over the coming year and a half, a leading executive has said.

Costa Rica exports around 100,000 tonnes per year to the Middle East, said Jorge Sauma, chief executive of Corbana, the association of banana producers in Costa Rica.

"There is a great deal of potential for growth in the Middle East, that's why over the coming year and a half we want to double our banana exports to this region," Sauma told Reuters in an interview during a visit to Dubai.

The Middle East's annual banana imports tripled between 2001 and 2007 to 737,000 tonnes, according to research by Corbana.

"The growth rate in the Middle East is very encouraging," he said. "However, the high cost of shipping is the main challenge facing South American countries expanding exports to the Middle East."

Fresh fruit traders in the region generally prefer to import bananas from the Philippines due to lower costs, he added.

"The solution to this is to educate traders about the quality of South American bananas and to try to consolidate shipments of fresh fruits together so it would contain more than one product."

Costa Rica exports around 1.87 million tonnes of bananas per year, generating revenues of $674.2 million, according to data from Corbana.

"Revenues from bananas are the third-largest contributor to Costa Rica's GDP, that's why expanding our trade would mean a lot to the growth of our economy."

Due to heavy rain and fluctuations in temperature this year, the country's exports could be down 20 percent at 90 million boxes, each containing 18.14 kilograms, said Sauma, adding that by 2010 the outlook for exports is expected to recover to 108 million boxes.

An end to the world's longest trade dispute, involving bananas, could be resolved this year by the World Trade Organisation, said Sauma.

The dispute involves members of the European Union (EU) giving preferential treatment to Caribbean and Pacific (ACP) countries - mainly former British, French and Portuguese colonies - who are not charged export tariffs on bananas.

The deal - which could be reached before the WTO's ministerial conference starting on Nov. 30 would see the EU cutting tariffs on bananas for suppliers in Latin America and elsewhere.

"What we are asking for right now is for the tariffs to be reduced from 176 Euros to 75 Euros, but in an ideal world it should be zero," said Sauma.

The WTO has ruled that the current EU regime for bananas for Latin American countries - who market their fruit through US distributors like Chiquita and Dole - is unfair compared with preferential arrangements for ACP states. (Reuters)

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