FAO says the prospects for further growth of organic banana sales appear to be good in all major markets, though further growth is limited by the lack of supply, due to constraints in organic banana production in many tropical countries. The greatest obstacle is Black Sigatoka, a fungus prevalent in many banana producing countries. So far, FAO says there is no effective organic treatment for fungus. Logistics is also an impediment to organic banana export. Because volumes are usually small, freight charges are higher.
Shipments often await sailings carrying non-organic bananas.
According to FAO, the higher labour input requirements and the benefits of using inter-cropping, or mixed farming systems makes organic banana production well suited to small and medium farms. Depending on the market, the price premium at retail level may vary from 50 percent to 200 percent. The price premium to producers is substantial, albeit more difficult to estimate. In other developments at the IGG meeting on Bananas, FAO said the sharp 15 percent drop of per caput real incomes in Russia between August and December 1998 continues to curb demand for bananas. The declining Russian birth rate and fewer small children in the population also depress demand.