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Chiquita raises banana prices in response to higher tariffs

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The company this week announced that its banana prices in North America rose by 1 percent during the first two months of the year, compared to prices in January and February of 2005.

Average prices in the European Union, Switzerland, Norway and Iceland also rose 5 percent on a local currency basis.

According to the company, the higher prices have resulted from "a strategic shift in sales to more premium Chiquita-label fruit, which sells at significantly higher prices than the company's second-label fruit, in addition to the impact of higher tariffs and other industry costs."

Indeed, in February 2005 pricing in North America included surcharges of $1 per box implemented to offset flooding in Panama and Costa Rica a year ago. However, these price hikes were only in place for several months.

In contrast, the 2006 surcharge is expected to "continue indefinitely" , with quarterly adjustments designed to reflect changes in the market price of fuel and related products.

The company also noted that it had renewed certain fixed-price contracts at higher prices, which either went into effect in February 2006 or are due to go into effect over the next few weeks.

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