"2014 has been exceptional; we sold 70% of the bananas through contracts, which is a truly high percentage. This year, however, due to the soaring prices that we registered, the situation will be very different," says Eduardo Ledesma, president of the Association of Banana Exporters of Ecuador.
The minimum price that producers are to receive for their fruit in 2015 is 9% higher than last season. Thus, a 19.5 kilo box of exportable Ecuadorian bananas will cost 6.55 dollars.
"Last season we reached a record high figure, with 295 million boxes exported. The global picture was very different and high demand resulted in really good prices. This year, many buyers have already expressed dissatisfaction and said that they will not buy the fruit at those prices, so we'll sign fewer contracts and have more spot sales," explains Eduardo.
In line with what Ledesma says, not only will there be a greater supply from competitors such as Colombia, but Russia, Ecuador's main customer, with 25% of the country's banana exports, recently reduced its weekly purchases by 300,000 boxes because of the drop in value of the Rouble and the economic crisis.
"Russia is not going to stop buying bananas, but payments will be delayed and this will ensure problems and difficulties," affirms Eduardo.
Necessary to protect the sector
According to Eduardo, the short-sightedness of producers has led to this price increase, which he does not hesitate to describe as "a crazy situation that will leave us out of the market in many ways."
"It is necessary to protect the sector and the country. The banana sector has always received plenty of criticism, about its alleged inability to comply with environmental and tax obligations. Today we are making every effort and complying with all regulations. We have reached an agreement with the SRI (Internal Revenue System), and as a result we have obtained a new system to calculate taxes on banana exports, the Single Tax on the Production and Exploitation of Bananas, which is much clearer, simple to apply and will add significant contributions to the country's treasury," concludes Eduardo.