Banana Production. Is the Investment Worthwhile?

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Banana Production. Is the Investment Worthwhile?

Banana cultivation plays a prominent economic role in many countries of the world, as it occupies an important position in global trade. From here, the economy of some countries, such as South America, depends on this agriculture, leading to the nomination “Banana Republic”.
The global production of bananas reaches approximately 115 million tons annually, with India coming first with about 22% of global production; Followed by China. As for the Arab countries, Egypt ranks first, followed by Morocco, Yemen and Lebanon (annual production of 70 thousand tons).

Bananas are a nutritionally rich fruit that is consumed all year round. Therefore, investing in its cultivation generates good profits and is often relatively safe, devoid of the risks afflicting some other crops whose results are not always guaranteed.

What motivates investment in this agriculture?

1- Active investment in the banana market throughout the year.
2- Prices are relatively stable compared to the prices of other commodities.
3- Achieving self-sufficiency in the local market and exporting the surplus to foreign markets.
4- Exploiting agricultural lands to increase production.
5- Contributing to revitalizing the economic cycle and increasing the national product from the revenues of the local agricultural sector.

The economic feasibility of banana cultivation

Banana cultivation in recent years is one of the most expensive cultivations. This is due to the increase in the prices of all production inputs, especially the prices of fertilizers and pesticides, in addition to energy prices and the increase in freight rates globally.
The cost of banana cultivation is calculated by calculating all expenses, which are determined as follows:

  1. Land rent
  2. Irrigation operations such as the means and systems used
    Fertilizers of all kinds, such as organic and mineral fertilizers, as well as soluble fertilizers with their trace elements and amino acids.
  3. Pesticides, especially nematicides
  4. Labor wages
  5. Marketing operations and the value of discounts on production
  6. Equipment consumption (irrigation network – protection network – production carriers – plastic if used)
  7. Banana seedlings

Economic feasibility per dunum (field farming)

Cost of cultivation
$300, ground rent
$350, fertilizers and pesticides
$150, fuel
$30, nylon bags
$100, labor
$930, total cost

Net production per acre 3500 kg
Average price per kilo (yearly) $0.35
Production revenue 3500 x $0.35 = $1225
Net amount achieved $ 1225 – $ 930 = $ 295 / acre

Economic feasibility per dunum (protected farming)

Cost of cultivation
700$ land rent
$350 fertilizer
$150 fuel
$30 for nylon bags
$100 labor
$1330 total cost

Net production per acre 5500 kilos
Average price per kilo is $0.40
Production revenue 5,500 x 0.40 = $2,200
Net amount 2200 $ – 1330 $ = 870 $ / acre

Note: We did not mention the cost of banana seedlings because of its low cost in relation to its eight-year cultivation period.

After reviewing the feasibility study of banana cultivation, we can conclude that this investment, despite the obvious increase in cost, is still economically feasible through the constant demand for this fruit in the local and foreign markets.
The only requirement is to provide the necessary technical needs as well as the favorable climatic and environmental conditions for this cultivation with a commitment and adherence to the success factors of this investment.

Maryse Bou Zeid

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