Emerging Markets / October 24, 2017

Pineapple Markets and Production Dynamics

The MD2 pineapple variety, also known as Gold Extra Sweet, is recognized internationally for its great aroma and exquisite flavor as well as its high vitamin C contents and low acidity. Likewise, MD2 pineapple contains B vitamins, sugars, water, and fiber; overall 100 grams of this pineapple provide some 50 kilocalories. Aesthetically, the MD2 pineapple is of golden color along its outer crust and its external form is symmetrical and uniform. Originally introduced in 1996 by Del Monte and the Pineapple Research Institute, the MD2 pineapple has soared in popularity and its global demand has skyrocketed, due mainly to its organoleptic characteristics, its high carbohydrate intake, and the contents of an enzyme that aids in the digestion of protein.

The nutritional composition of the MD2 pineapple, like other fruits, varies according to climate conditions, soil, crop management, fertilization, and post-harvest treatments, among others. However, despite its sweetness, the caloric value of the MD2 pineapple is moderate. Furthermore, when originally introduced, it was found that though not great for making juice, the MD2 pineapple is more aesthetically pleasing than other varieties, such as Smooth Cayenne. Likewise, the MD2 pineapple has an attractive yellow color and is somewhat more square-shaped than Smooth Cayenne, so it is easier to transport and display. Therefore, the MD2 pineapple variety, mainly cultivated in Costa Rica, gained large popularity and acceptance in western European markets.

Pineapple Markets and Production Dynamics

The market for fruits in Europe is defined by the supermarkets and retailers, which have huge leverage and influence over what is sold, imported, and produced. When major chains in Europe and western markets began demanding MD2 pineapple, which is grown primarily in Central America, instead of Smooth Cayenne, which is mainly grown in West Africa, producers, exporters, and the industry as a whole had a choice to make. In the specific case of Ghana, most pineapple farmers fell under immense pressure to switch from Smooth Cayenne to MD2. However, others decided to stick with the pineapple variety that they were good at planting and producing in high quality, which was Smooth Cayenne. Today, MD2 pineapples are more costly to grow in Ghana due to the climate conditions and soil characteristics. In West Africa, it is more expensive to grow an acre of MD2 pineapple than of Smooth Cayenne, which puts local farmers at a strategic disadvantage. The Smooth Cayenne variety, originally cultivated in West Africa, is a spineless pineapple cultivar that boasts sugary, low-fiber flesh, and striped leaves. Furthermore, because of its lack of aesthetic appeal, Smooth Cayenne has become the pineapple of choice for lower cost sweet canned fruit products.

Meanwhile, in Central America, the soil and the weather are ideal for growing MD2 pineapples and achieve massive economies of scale, which are highly cost efficient. Therefore, throughout the last decades, the Costa Rican suppliers have been able to offset Ghana’s economic advantage from lower freight costs as a result of its geographic location and become the world’s leading exporters of pineapples.

(Read more about Macroeconomics and Trade in Panama)

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