Flagging banana prices have left Fyffes dependent on the benefit of European import duty concessions to meet the profits target which the tropical fruits group lowered last month.
The Irish based group warned of "unfavourable" and "difficult" market so far this year, highlighting conditions since early March, when the company cut to E14m-18m its forecast for underlying earnings for the full year.
"Selling prices, particularly in Continental Europe, in the period since then have been significantly lower than anticipated," Fyffes said.
While the company said it was standing by its target range for earnings before interest, tax and amortisation for 2010, hitting it was dependent on Brussels implementing duty reductions agreed in December to end to the so-called banana wars.
European Union imports on duties of bananas from Latin America are being reduced, over seven years, from E176 per tonne to E114 per tonne, making them more competitive with shipments from former French and UK colonies in Africa and the Caribbean, which pay no tariffs.
The concessions appear "to be proceeding as expected", Fyffes said.
Prices tumble
The company failed to elaborate on the reasons for the soft conditions in the fruit market.
However, Fyffes has a history of weaker sales during the kind of extended cold conditions which Europe suffered this winter.
Sipef, the bananas-to-rubber plantations group, said last week: "Due to an extended winter in Europe with reduced consumption and generally large supply, the spot market price for bananas dropped substantially, 20%, below last year's first quarter 2009 prices."
Fyffes made its announcement after the close of share trading in Dublin, where its stock closed unchanged at E0.37.
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