Standard Fruit halts Honduran operations Claiming it can source fruit more cheaply in Guatemala the Dole subsidiary is to close eight of its banana farms after 85 years of production in the Olanchito region. Quote : ‘La transnacional aduce que en Guatemala están comprando la caja de banano a menos costo que en Honduras, esto sin ningún costo social.’ 'The ITUC joins with the United Trade Union Confederation of Guatemala (Confederación de Unidad Sindical de Guatemala -CUSG), the General Workers’ Centre of Guatemala (Central General de Trabajadores de Guatemala - CGTG) and UNSITRAGUA in condemning in the strongest possible terms the assassinations on 6 and 26 March of Luis Felipe Cho and Samuel Ramírez Paredes. Samuel Ramírez Paredes, General Secretary of the Panchoy district banana workers’ union (SITRABI) and a member of both the Consultative Council of the CUSG and of the MSICG, was assassinated while members of the MSICG were holding meetings with members of the United States government in order to lodge complaints within the framework of the Central America Free Trade Agreement (CAFTA) against the State of Guatemala for serious violations of labour and trade union rights in the country’s banana sector.'
Long term you are correct for all the companies in the sector. But if you listened to the call today they gave a pretty strong signal that banana prices have been soft in overseas Asia and Europe markets in the first months of the year and that was a not too subtle signal that industry earnings will be weak in the first quarter. Fyffes in Europe already wrote a guidance reduction in their final 2009 report. Dole is market leader in Japan with Delmonte not far behind so they will both get hurt from Asia. CQB is largest in europe so do the math on that. At least dole also said they expect to see a makeup in pricing for the rest of the year and that often happens in the produce cycles when players are suffering. It is amazing that none of the analysts picked up on this except most of the ones covering this sector at this point are not the sharpest knives in the drawer. So the big three could probably still hit good numbers for the whole year but will have a bouncy ride during the frist two quarters.