Here's why bananas remain affordable as food prices rise
Chiquita bananas are on display at a grocery store on Aug. 3, 2005. (AP/Amy Sancetta)
Published Thursday, September 22, 2022 9:25AM EDT
Even though Canadian grocery prices are rising at the fastest pace in more than 40 years, bananas are still cheap.
According to Statistics Canada, average retail prices for bananas in July 2022 stayed relatively stagnant when compared to the last few months. At $1.68 per kilogram, bananas are one of the few fruits that are still affordable for many households.
The global market demand has helped keep banana prices stable.
“Bananas are serviced by a highly vertically integrated supply chain, so you have farmers being supported by multinationals,” Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, said in an interview with CTVNews.ca.
Being grown in equator countries like Ecuador, Costa Rica and Asia, bananas don’t have a set growing season and flourish year-round.
According to the Food and Agriculture Organization of the United Nations, banana figures worldwide have risen dramatically since 2000.
Data from the organization shows banana production grew at a compound annual rate of 3.2 per cent from 2000 to 2017, up from 67 million tonnes to 114 million tonnes.
Extra supply allows bananas to stay at a consistent price despite other products suffering in volatile markets.
The fruit is also a “loss-leader,” meaning it will be priced low to keep consumers coming back.
“It hasn't been impacted by this anti-plastic movement, because a peel is very compostable,” Charlebois said. The price of products encased in plastic, such as berries, will continue to increase as the federal government cracks down on single-use plastics, he predicted.
Coupled with the loonie dropping in value and the fast-approaching winter, items like dairy, out-of-season fruits and vegetables and bakery products are on the rise.
“We are expecting more dairy products to become more expensive as we roll into the fall,” Charlebois said. “Produce, vegetables in particular, they’re already up compared to last year.”
The Canadian dollar dropped to its lowest point in two years against the U.S dollar. As this continues imported items will cost consumers more.
The Consumer Price Index in August 2022 rose 10.8 per cent, the fastest pace since 1981. Year-over-year, fresh fruit rose 13.2 percent but bananas stayed low.
Statistics Canada shows year-over-year in August, the cost of bananas rose 3 per cent, with other fruits like apples and oranges rising 11.8 percent and 18.5 per cent each.
Other items worth adding to the grocery list include tofu, which is manufactured locally for the Canadian market. The high-protein, plant-based product has only inflated slightly in the last 15 to 20 years, Charlebois said.
The made-in-Canada supply chain aids tofu price consistency and is not often impacted by climate-related fluctuations.
“A lot of things can happen with animal livestock, the production cycle is much more complicated,” Charlebois said.
Recently the rise of bakery items has taken Charlebois, and consumers, by surprise.
Statistics Canada notes bakery products rose 13.6 per cent year-over-year, due to increased prices in wheat.
Making products from scratch is less expensive than buying them in-store. Pricey ingredients like butter and eggs are one of the reasons, Charlebois says, for the rise in the costs of pastries, breads and wraps.
According to the Consumer Price Index the price of flour has risen 23.5 per cent in August year-over-year, but the initial price was quite low, meaning it's still relatively affordable.
“Flour is stable,” Charlebois said.
In order to keep bills low, Canadians have invested in deep freezers to save food.
“I would say to visit the freezer aisle much more often,” Charlebois said. “Because you can actually control the flow of the supply chain, you basically can capture all the nutrition you need at harvest, but you can actually sell your product at any given time.”