Thread by @Jim_Cornelius

There are no tariffs on ACP bananas (from former colonies in the Caribbean & Africa, such as Dominica and Cameroon etc), but there are from but Latin American producers etc

What's the percentage on non-ACP countries? Is it as this Guardian article says 62.3%?

What do you think?

First of all, where do the bulk of non-ACP bananas come from?

As this chart shows about 90% come from Ecuador, Colombia and Costa Rica.

So what's the tariff for bananas from these countries?

ec.europa.eu/agriculture/si…

Normally I would head straight to the UK tariff website at trade-tariff.service.gov.uk/trade-tariff/c… but it is currently broken, not showing most EU FTA data (ominous). But it is at least showing MFN tariff and most preferential South/Central American rates. It's not showing Colombia.

So we have to use the EU's website instead. There are two versions

This site: madb.europa.eu/madb/euTariffs…

And this site: ec.europa.eu/taxation_custo…

The latter site allows some limited ability to see information for all countries at the same time and we can see Colombia at €82/tonne.

So we've got the following tariff for those main exporters.

Colombia: €82/tonne

Costa Rica: €82/tonne

Ecuador: €83/tonne

So what does this represent as a percentage? We need to know how much bananas are being sold at to importers.

One in three bananas bought in the UK is Fairtrade bananas. We'll use Fairtrade figures but bear in mind that non-Fairtrade bananas will be purchased more cheaply. We can check this later.

fairtrade.org.uk/en/buying-fair…

There is a Fairtrade Foundation database that shows minimum banana prices under the Fairtrade scheme. fairtrade.net/standards/pric…

We're interested in the free on board (FOB) price. This is the price an importer would pay at the dockside, rather than at plantation (ex-Works)

FOB and EXW are explained here: investopedia.com/ask/answers/04…

The table in the last tweet shows that the FOB price for these countries is in USD and the crate size is 18.14kg The Fairtrade premium is added on top.

We can convert the quantity to tonnes and convert the price to Euros.

Colombia 10+1 USD/18.14kg =US$606.39/tonne
Costa Rica 9.7+1 USD/18.14kg =US$589.86/tonne
Ecuador 12.1+1 USD/18.14kg =US$722.16/tonne

1USD=€0.88

Colombia €538.48/tonne
Costa Rica €519/tonne
Ecuador €635.50/tonne

So now we can work out the MAXIMUM tariff on Fairtrade bananas

Colombia 82/538.48 = 15.23%
Costa Rica 82/519 = 15.7%
Ecuador 83/635.50 = 13%

So where the heck does the Guardian get the figure 62.3% from!?

Let's look at the worst case. The MFN tariff and the minimum possible price for a crate of bananas to get that tariff.

The MFN tariff is €114/tonne that equates to US$129.55/tonne or $2.349/18.14kg box.

If the $2.349 represented 62.3% of the FOB cost of an 18.14kg crate it would mean a crate would have cost $3.77. this seems highly unlikely.

This overview of the banana market suggests much higher prices

freshplaza.com/article/219698…

And in 2018 Ecuador set the minimum price on bananas at US$6.30

freshplaza.com/article/903723…

The Guardian's figures on bananas here are highly questionable, and I have other issues as well, some of which I mentioned here.

https://twitter.com/Jim_Cornelius/status/1099528671877103616

One more thing. Those tariffs are on goods at import. Not retail. A 10% tariff does not equate to a 10% rise in retail price. There's many costs above the cost of the raw commodity, so there isn't a 1/1 relationship. Defra uses a coefficient of 0.27, so a +15% = +~4.05% retail.

I just noticed that the Ecuadorian price I used was for organic bananas. So for non-organic it's 9.2+1 USD/18.14kg = US$589.86/tonne = €494.82/tonne so tariff = 83/494.82 = 16.78% tariff.

Thanks to @Rus_Tego who has pointed out that tariffs are charged on the CIF price (Cost, Insurance and Freight) not FOB. So additional charges to the importer before clearance abd percentages quoted above should be lower. Remember these are max percentages investopedia.com/ask/answers/02…