The market for fresh pineapple has been growing rapidly during the past years.
Like other tropical fruit, pineapple is grown mainly in developing countries.
Production of conventional pineapple is mostly dominated by big transnational companies that own large-scale plantations. As a consequence, it might be difficult for small farmers to participate profitably in the market. However, not only did the demand for pineapple in general increase over the past, but organically grown pineapple have also become more popular among consumers. Nevertheless, organic pineapple is still a niche market, which is not controlled by a few big companies, yet. Like other organic products, organic pineapple earns a premium price on the market compared to conventional varieties. Hence, the shift from conventional to organic production might be an opportunity for small and middle-sized farmers to reap higher returns from their investments. Since this change, however, might require costly adjustments of, for example,production techniques as well as considerable costs for certification, several aspects of this market and organic production need to be considered when trying to determine its profitability. One aspect is the size of the price premium and if it can persist over time. Another one is if prices for organic pineapple behave differently from prices for conventional pineapple. For example, one might ask if organic prices are more or less stable than prices for conventional pineapple, and if organic and conventional pineapple can be seen as two different products or if
the markets for them are interlinked with each other. Differences between conventional and organic pineapple production that are not related to the price received on the market, such as the unit cost or the depletion of the soil, are also
important. In this paper, however, we restrict our focus to the price dimension of the profitability of organic pineapple production. This aspect has not been studied before, despite its importance for the further promotion of organic certification in developing countries. We analyze spatial price transmission between conventional and organic pineapple on the European market by looking at prices for pineapple from Ghana, Côte d’Ivoire and Costa Rica respectively. Our
observations suggest that there does not seem to be a trend for a diminishing premium so far. Moreover, our price transmission analysis shows that although price variations for organic pineapple seem to be larger in magnitude over a
1 longer horizon, in the short run organic prices tend to be more stable. Whereas the conventional price seems to be unaffected by the organic price behavior,organic prices follow conventional prices with a lag, which smoothes short-run
fluctuations for organic pineapple prices. Such a delayed price transmission also helps forecasting future price movement in the organic market. More stable and predictable prices might be beneficial for farmers in developing countries, as they
guarantee more certainty for the producer.
The rest of this paper is organized as follows. First, an introduction to the European market for pineapple will be given. Secondly, the price data and price evolution for conventional and organic pineapple will be presented. Afterwards,
the methods used to analyze spatial price transmission will be described, which will be followed by the results of this analysis. Finally, we will conclude.