Dole Expects Banana Price Drop to Affect Profit

Dole Food Co. in Westlake Village said it may report a loss in the third quarter because of falling banana prices in Europe.

Dole said it expects to report either break-even earnings from continuing operations or a slight loss. The company was expected to earn 13 cents a share.

It’s the third time in five months that Dole said profit will be hurt by an increase in the number of banana-import licenses issued by the European Union. The increase in licenses resulted in a surplus of bananas, depressing prices.

“Pricing in Europe has been horrible,” said analyst Timothy Ramey of Deutsche Banc Alex.

Dole also cited costs associated with the aftermath of Hurricane Mitch, the citrus freeze in California and lower-than-expected prices for flowers.

Bananas have been at the center of a recent trade rift between the United States and Europe. In April, the U. S. government imposed 100% duties on imports of handbags, batteries and other products made in the European Union. The duties cover nine categories of products on trade worth $191.4 million a year.

The duties were imposed after the World Trade Organization agreed with the United States that import rules adopted earlier this decade by the EU, which favored former European colonies, unfairly restricted bananas grown in Latin America by U. S. banana companies.