After a first half of 2014 characterized by volatile weather conditions dragging down banana supplies, Chiquita Brands International (NYSE: CQB) has indicated the amount of fruit on the market may improve in the second part of the year.

Speaking during a webcast after the multinational's results announcement last week, CEO Ed Lonergan discussed a few supply dynamics from Latin American banana-growing countries, while also mentioning that lower port availability in the Mediterranean was leading to more fruit in Europe and the U.S. recently.

"The wild card is excess fruit in the second half. The Colombian weather situation, and blowdown, certainly reduced cases in the market in July, but Ecuador continues to produce above year-ago," Lonergan said.

"And as you probably recall, in August or so of a year ago, they had about a 20% increase year on year versus 2012.

"As long as Ecuador produces aggressively, we don't see tremendous tightness in the market through the second half of the year. At the same time, we are hopeful that there is more balance than there was year-ago."

In terms of South America, where supplies have hit by varying factors over the past six months, Lonergan estimated a 10% reduction in productivity per stem compared to what was anticipated.

"So, that's [two kilos] to three kilos, depending upon where you are in Central America, and that's been pretty consistent through every week of the year," he said.

"And having been now in all the divisions this year, it's different causals in different parts of Central America; in Panama and Costa Rica, it was drought; in Honduras, Sigatoka, and Guatemala, blowdowns in the North.

However, Lonergan emphasized how frequent surprises could be in banana production, but practices were taking place to reduce the impacts from and exposure to such risks.

"Every time we think we are moving beyond this, then there are a few other little things that come along. So, Mexico had a blowdown three weeks ago, so we are keeping an eye on things.

"We are doing the right things from a productivity perspective. We are rejuvenating farms. We are replacing irrigation. We don't think this is a long-term situation.

"We think that there are weather and pattern changes in Panama and Costa Rica that require differences in how we farm. No question about it. But, we think the balance [sic] are short-term in nature."

When asked about how Russia's sanctions might affect Chiquita's business in that market, the executive forecast Russians would be consuming more bananas, but the restrictions would also potentially lead to more bananas in the European market.

"Well, obviously, bananas are important to Russia and bananas are [sourced] mostly through traders, from primarily Ecuador. And so Ecuador is not in the list of sanctioned countries and the business that we do is through local players, so we don't anticipate change there either," he said.

"At the end, we do anticipate Russia will consume more bananas over the next month, if these sanctions go into play, because it replaces many fruits that are going to become scarce in the country. That said, all the fruits that were headed to Russia from Europe are going end up in Europe.

"And so, I wouldn't anticipate, for the banana industry, there's any help or hurt from these substantial changes, assuming they go into play, and we'll just have to see how it comes together in the quarter."

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