Waitrose has raised the price of bananas to 75p per kg reflecting the impact of flooding and other disruption in Central American producer regions before Christmas as well as unfavourable exchange rates.
The top four retailers are so far holding the price at 72p per kg, having raised the price in November from the longstanding 68p/kg price point to reflect increased cost pressures.
Production in the Dominican Republic and Costa Rica was disrupted before Christmas due to severe flooding and an ash cloud, while recent heavy rain and flooding in Peru has hit banana producers in the north of the country.
But the price rise is not believed to be solely down to supply issues. A banana industry insider told FPJ that Waitrose predominantly sources its Fairtrade bananas in dollars, rather than euros, and suggested that may be why it was first to raise prices as the dollar has fallen more steeply.
Along with other Fairtrade banana retailers, Waitrose must pay a licence fee in the UK as well as the dollar premium to growers, meaning it will be paying around 5-6p per kg more than conventional loose bananas, the source added.
Other retailers may now follow suit, the source said, following years of deflation in the banana category. "The retailers have spent all their time reducing their loose prices over the years and now they have reduced bag/packed prices. So the only way is back up now, while it is currency-led," the source said.
Heavy rainfall in the Dominican Republic caused major damage to banana farms in the north of the country in November, with the Dominican Banana Association (Adobanano) estimating around 5,5500ha of plantations would be affected.
Before Christmas, president Simeón Ramírez said exports would be down by around 90,000 boxes from their average weekly total of 380,000 boxes.
Meanwhile, in Costa Rica, an ash cloud from the Turrialba volcano caused disruption to banana crops around the same time, damaging plant roots and burning the skin of the fruit.