Financial Education - Key descriptive data on Latin America as a banana-producing region

Latin America is the world's leading banana producing economy not only in terms of its share of world trade, but also because of its greater responsiveness to changing market conditions compared to other regions.

In its forecasts of the evolution of world banana trade, the Food and Agriculture Organization of the United Nations (FAO) has recently used export supply equations for Latin American countries that included relatively high own-price elasticities compared to other regions.

Some authors have also considered it important to include a high elasticity of response for Latin America to reflect its ability to react easily to changes in world prices.

In addition, the supply functions included trend coefficients to capture non-price growth (such as economies of scale, technical efficiencies and technological change) and whose magnitude was high for Latin American countries.

The phenomenon of supply growth based on productivity increases has been observed throughout the history of the world banana economy, source (FAOSTAT), thus agricultural commodity prices are an indicator of changes in supply and demand and, as such, may reveal unusual conditions to which attention should be paid.