Banana Monopoly Driving Fruit Prices Up 200%

A monopoly on bananas in Azerbaijan is causing prices to rise by as much as 200%.

‘The price of bananas in Azerbaijan has more than doubled since January, and bananas are being sold in retail chains for no less than 3.5 manat (more than two dollars) per kilogram. And nobody can explain the reason for such a precipitous growth in this price’, writes Turan News Agency.

The agency notes that on the world market, bananas are offered at a price of 250-300 dollars per metric ton, or 25-30 cents per kg.

Transport costs in the realm of 18 cents are added on. Customs duties are around 36%, meaning an additional 12 cents added to the wholesale price. This means the price of one kilogram of bananas in Baku should be no more than 60 cents. If we include profits both for the supplier and the retail chain, it should be no more than a dollar, or 1.7 manat, but not 3.5 manat.

In 2016, 21,515 tons of bananas were shipped to Azerbaijan for a sum of 17,880 million dollars, or 1kg for $0.90. The agency notes that the reason for all this is monopoly, and the Antimonopoly Department of the Ministry of Economy remains silent. As such, nobody is combatting this artificial overpricing.

At the end of 2016, President Ilham Aliyev issued a decree intended to prevent artificial overpricing.

Ilham Aliyev declared in October that, “We cannot allow artificial overpricing. There must be very serious restraints on this – both societal restraints and restraints from state organs. We cannot allow shady individuals – speculators – to artificially overprice goods and in doing so cause people suffering”.

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