Top banana exporter Ecuador has declared a state of emergency following the destruction of hundreds of banana plantations, sparking fears that banana prices are set to surge. Prices are expected to shoot up as supply lines tighten and a failure to secure retail price increases last year, analysts expect profit margins at Fyffes and other major industry players to come under more pressure.

Davy analyst John O'Reilly said the damage, at the very least, is expected to interrupt supplies from the world's largest banana exporter and given the time of year, push spot prices higher. However, he said that Ecuador, on the latest export data, is not a significant direct source of supply for Fyffes.

Earlier this month the group reported a 30pc decline in profits before tax for 2007, which fell to €13.2m from €19.1m in 2006. It said the key drivers of the banana business were selling price, exchange rates and the costs of fruit, shipping and fuel.