Move over, eggs – bananas are the next victim
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Just when consumers were expecting some relief on egg prices, bananas might be the next victim.
The U.S. fresh fruit market is bracing for a price surge as proposed port fees threaten to disrupt the banana supply chain – putting shoppers in the crosshairs of yet another price squeeze.
Dole Plc (DOLE+1.67%), the largest U.S. supplier of bananas, is warning that the U.S. Representative’s proposal to impose million-dollar fines on Chinese-built cargo ships could disrupt the banana supply. The plan would use funds from fines – up to $1.5 million – on ships built in China or those with Chinese-built vessels.
Jared Gale, Dole’s chief legal officer, said the plan would not only severely impact the U.S fresh fruit trade but also squeeze consumers. He added the proposal would target the small, refrigerated vessels crucial for transporting bananas from tropical regions to the U.S.
Dole currently operates 13 specialized ships, including four built in China. Gale noted the Chinese fleets were bought when no U.S. alternatives were available. China now manufacturers over 50% of the world’s cargo ships, a sharp increase from the 5% in 1999, according to the U.S. trade representative (USTR). If the fees pass, increased operational costs will likely be passed on to consumers in the form of higher prices.
Target CEO Brian Cornell recently stated that tariffs would force the company to raise prices on popular items like bananas, strawberries, and avocado.
Those potential price hikes come just as consumers are still reeling from sky-high egg prices. After months of unprecedented price increases, egg prices were expected to drop sharply in March, thanks to fewer bird flu outbreaks, weaker demand, and increased supply. However, these price drops won’t be felt at the checkout counter for another month due to egg’s typical four-week shelf life.
Bananas, already a low-margin product, cannot be grown domestically at scale to meet demand. They travel over 1,100 miles from places like Costa Rica to U.S. ports, primarily through East Coast locations like Florida and Houston. In Oct. 2024, a big U.S. port strike pushed bananas into higher price discussions.
