Just a couple of quick notes from Chiquita’s first-quarter financial report, issued May 1. The company made a $31.7 million profit – after losing $3.4 million the same period last year – fueled mostly by surging banana prices. What’s interesting is that the actual amount of bananas people bought dropped – by one percent in the U.S., and fourteen percent in Europe – but because of bad weather and other market conditions that have constrained supply, prices have shot up: by 18% and 26% in the two selling areas, respectively. This made Chiquita CEO Fernando Aguirre very happy: “Banana pricing is very acceptable,” he told investors, noting that prices have held pretty steady for over a decade.
The other bit of interesting news is the soon-to-come opening of the first big Chiquita plantations in Africa, in Mozambique and Angola. The reason these commercial banana farms are being launched on that continent is to get around European tariff regulations that make Latin America-originated bananas expensive to sell in Europe. But it was the cutting of land for new Cavendish (that’s the world’s commercial banana) plantations in Asia two decades ago that led to the spread of Panama Disease there; that malady is now epidemic and threatens the world’s banana supply. There was no mention in Chiquita’s earnings call – nor has the company ever mentioned – what precautions it is taking to make sure the new plantations it is opening, or the transportation networks that connect the plantations to shipping areas, will be effectively sealed from existing banana crops. I can’t even begin to state how important this is in Africa, where bananas are a major subsistence crop, though I can tell you why Chiquita has made no such statement: because it has been proved, over and over, that it can’t be done.
And in good news, Chiquita has just posted a fantastic “cool stuff” page, with tons of old print and television ads, banana stickers, and other archival material. I’ll highlight some of it in the future, but it is definitely worth exploring.
News article on Chiquita’s earnings call here. Download a pdf of Chiquita’s results here. Listen to audio here.
Nobel Prize winner Paul Krugman 
