By Amitha Rajan

BANGALORE (Reuters) - Banana distributor Chiquita Brands International Inc's (CQB.N: Quote, Profile, Research) quarterly earnings blew past market estimates as higher banana prices, restructuring measures and a strong euro versus the U.S. dollar helped offset rising costs, boosting its shares as much as 18 percent.

Supply constraints induced by bad weather in parts of Latin America have driven global demand for bananas, pushing prices up.

Chiquita has reaped the benefits of the rise in banana prices, which has acted as a buffer against surging costs for raw materials, fuel, fertilizers, packaging, paper and charter rates.

Investors' confidence in Chiquita has not diminished despite the company's disappointing results over the last 12 months, during which it has tried to cut costs and grappled with food safety concerns and lawsuits related to its operations in Colombia.

Food industry-related expenses do not seem likely to fall in the near term, and Chiquita raised its forecast for industry costs to $150 million to $160 million from its earlier estimate of $90 million to $95 million.

Analyst Heather Jones of BB&T Capital Markets said strong banana prices have so far been enough to offset rising costs -- a trend she expects will continue at least until June.

But given the volatility of prices in the banana market, "it's hard to tell too far into the future," Jones, who has a "buy" rating on the stock, said.

The company, which competes with Fresh Del Monte Produce Inc (FDP.N: Quote, Profile, Research) and privately held Dole Food, said in a conference call with analysts that it could "more than overcome" the rising costs.