Eduardo Bolaño Fergusson, whose family has been in the banana business for four generations, explains that the sustainability of the business is at stake despite the continuous efforts being made to improve productivity levels. The revenue generated by the fruit's sales, which is calculated taking the peso-dollar exchange rate into account, does not cover the high production costs.
According to Anuar Escaf, President of the Association of Banana growers of Magdalena and La Guajira (Asbama), the peso's revaluation is a serious issue for the Colombian banana sector, as 100% of Magdalena, La Guajira and Urabá Antioqueño's banana production is exported overseas. A lower peso-dollar exchange rate does consequently affect banana producers, whose production costs are calculated in Colombian pesos.
What makes matters worse is that the situation is affecting small and medium growers, whose only alternative is the growing of bananas for export, as they do not have the means to diversify.
From 2009 to 2012, the average exchange rate has fallen from COL$2,156.29 for a dollar to COL$1,798.23 (-16.6%). The cumulative inflation for the same period reached 11.82%.
Eduardo Bolaño states that despite the fact that the current exchange rate (January 2013) is similar to that of 1999, production costs have grown by approximately 114.3%.
A huge call is consequently being made to the Central Government and Colombia's monetary authorities to take preventive measures to stop the peso's revaluation, as the sustainability of the country's banana business is in danger; a sector that creates close to 41,000 jobs and represents 51 and 22.7% of Magdalena's and La Guajira's GDP respectively.