Yesterday I met with the founder of a pineapple exporting company in Ghana. He is one of the first pineapple exporters in the country, opening his operation in 1985. He is one of the founding members of Seafreight Pineapple Exporters Group (SPEG), and is the organization’s first chairman. He was trained as a pharmacist and originally went into pineapple export because he needed to acquire foreign exchange in order to purchase pharmaceuticals from abroad for his pharmacy business, and realized he was in the wrong business. Ghana was sitting on a gold mine with pineapples, yet no one had noticed it. He recognized that the proximity of West Africa to Europe – specifically, the UK and Germany – and the climate of Ghana made for a strong value proposition for growing pineapple. This man, along with a small group of primarily businessmen with no prior farming experience, established the export market for pineapples in Ghana.
Back in the ’80’s, there were only five flights per week into Europe from Accra, the capital city of Ghana. Because of the limited space available, the quality of the fruit sent to Europe was high and Ghana established a strong reputation for producing good pineapples. Only 10% of production, however, could be exported due to the constraints. As more airlines began flying to Accra, production was able to ramp up, but still was unable to meet the huge demand in the European market. So in the 90’s TIPCEE (Trade and Investment Program for a Competitive Export Economy) helped establish SPEG to promote higher export volumes. They were able to get transport time down from 21 days to 13 days, which reduced spoilage rates on arrival in Europe and increased Ghana’s share in the market.
As part of the agreement, the ships, en route for Cote D’Ivoire, would stop in Tema (Ghana’s deep water port) and pick up an agreed-upon amount of pineapples. The exporters would pay a set rate of $110 per pallet for space on the freighter (in comparison, the Ivoirians only paid $85, since they had high volumes). If unable to fill the container, the exporters still pay for “dead freight.” To guarantee that all of the space was maximized, a cold chain from the farm gate to the port was required, as well as a cold storage facility to ensure that an adequate supply of fruits could be loaded onto the ship. Some of the exporters made these investments, including this man, who installed a facility in Nsawam, a town in the Eastern Region that is ground zero for pineapple production in the country.
The export of pineapples remained strong until 2003 when the European importers began asking if their Ghanaian counterparts could supply the MD2 variety. There are three main types of pineapple grown in Ghana. Sugarloaf is conical and very sweet, and is only sold in the local market. Smooth cayenne is a sweet, juicy variety that lacks the bright yellow color that most people associate with good pineapples. MD2 is a variety that was introduced by Del Monte in Costa Rica, and, though not great for making juice, it is aesthetically-pleasing (more yellow than smooth cayenne), which the housewives in the UK associate with a good pineapple. Also, it is a little more square-shaped than smooth cayenne, so it sits on the supermarket shelf better. The market for fruits in Europe is defined by the supermarkets and retailers, which have huge leverage and influence over what is produced. When Tesco and Marks and Spencer and the other chains in Europe began demanding MD2, which is grown primarily in Costa Rica, instead of smooth cayenne, which is grown in Ghana and elsewhere, the Ghanaian exporters, and the industry as a whole, had a choice to make.
Among the SPEG members, most felt they should switch from smooth cayenne to MD2. There was a small minority, including the man I was speaking with, who felt they should stick with the variety they were good at planting and could achieve high quality fruits, which was smooth cayenne. MD2 is more costly to grow in Ghana due to the climate conditions and soil. For smallholders and commercial farmers alike, it is more expensive to grow an acre of MD2 than it is of smooth cayenne. In Costa Rica, on the other hand, which has ideal growing conditions for MD2 and massive economies of scale, the cost of production is much lower. So, by reducing the cost of production, the Costa Ricans were able to neutralize the Ghana’s cost advantage from lower freight costs as a result of its proximity to Europe. And in the European market for fruits, unless you can come up with a value-addition (fair trade, organic, fresh cut, etc.), everything comes down to price. So, when the switch to MD2 occurred, it was an uphill battle and the Ghanaian exporters were never able to catch up to the Costa Ricans. In 2004, the industry began to decline and has never quite been able to recover.
When I asked him what the future of the pineapple industry in Ghana looks like, and what the industry needs to do to become competitive again, he told me that it is all about quality. If there is a way for Ghana to compete, it is going to be all about producing top quality smooth cayenne pineapples. We will never be competitive on a serious level with Costa Rica for MD2, which is what the European market demands. But by focusing on smooth cayenne, which has better juice than MD2, and by leveraging big companies like Coca-Cola, pineapples in Ghana might make a comeback. It remains to be seen how that will take place, but with a buyer like Coca-Cola demanding high volumes on a weekly basis, the industry could adapt and change quickly, which would be nice.
I’m pursuing a course in investment promotion and economic development, and am trying to gather information on the constraints a pineapple pulp manufacturing facility could face in Ghana. The advantages of setting up such a unit in Ghana are adequately known, but I’m running into a wall with regard to the pitfalls. I’m sure it cannot be all good and no bad with regard to the project involved.
I read your article above and the threat to Ghana’s pineapple export numbers from the MD2 variety seems serious. However, I would request your expertise in helping me with the following queries:
1. Is the MD2 variety also preferred by the EU market for pineapple pulp? Or, does it make no difference if the pulp is prepared from either MD2 or sweet cayenne?
2. Broadly, what are the challenges that such a factory would face — logistical, policies and regulations, taxes, labour costs, infrastructre, etc.?
Thanking you in advance.
Hi Bhanu – I will send you a longer email later, but my email is down right now. I don’t know too much about pineapple pulp but would be happy to talk in more detail about the sector. I will send you an email, but also my email is firstname.lastname@example.org
i am a pineapple producer in Ghana.
with the introduction of this MD2 have given us three variety of pineapples in Ghana.
how ever,its very sad its introduction has collapse the quality type cos its was said by the buyers that,its was not of the standard quality which led to its extinct,they later came back and said that rather is the the most quality of all.
contact me for more…………………
Hello, i am a student of KNUST pursuing a degree course in Agribusiness,i am trying to analyze the cost and revenue involved in producing the smooth cayenne variety and MD2 so as to asses which is more economically advantageous to produce in Ghana, I found your article quite insightful and educative and i believe you can help me in gathering information on the chosen topic.counting on your cooperation.
Thank you in advance,
Am a young graduate who has taken agriculture to be a very serious business, I have acquire 5 acres of land around nsawan and planning to use it for pineapple farming, but upon reading your article am a bit alarmed as to the availability of market , please advise me
We are a major farming orginazation with very large land holding and want to start plantation of pine apple production for the european markets. Because we do not enough finding we seek partnership ro ubder take this venture. We are open for discussion and will provide details information of our desire and positiion. We are Knu Shong Industries Inc. Monrovia, Liberia. We well come your comments and suggestions
Hi I am young man who want set up pineapple export factory in Ghana. I will be glad if you will help me with the total cost
I became an automatic sugar loaf pineapple farmer from my infancy since my parents are only pineapple growers in my area (Ekumfi Atwia in the Central Region of Ghana). Having pursued Quantity Surveying and Construction Economics at KNUST, I thought it wise to also establish my company to export pineapples from my area. In fact, I have become almost confused upon reading your article with regards to the MD2 variety. We produce only organic sugar loaf pineapples and not the MD2 variety. Can I also get market for my variety or I should try and produce the MD2 before serious business commences. I really need your advice.
I want to establish a pineapple export company in Ghana. please help me, what is the requirements?
I’m yet to go into pineapple farming what I do and how do I get a market for my produce