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Ecuador: Non-contract producers sell a box of banana for up to $ 3.40

Bananas are the country's most important non-oil export product and involve thousands of people, so the government has set a fruit box support price. It is of $ 6.26.

The aim is to ensure profitability for producers  throughout the year, and for exporters not to bear any harm. However, during the low season, or in times of low demand, this fruit price falls. 

The biggest demand for bananas is from the United States, Europe and Russia between January and May, a time which is during Ecuador's biggest harvest. This, according to the president of Agroban, Gustavo Marum, is lucky, and is the reason why the country is the world's first exporter. 

Marum emphasizes that between June and September, demand in the main markets declines, which affects the price.

A couple of months ago the value of the fruit was at its lowest market price, and did not exceed $ 2. Which meant that in farms they were bought at a lower price, which causes losses to the farmer. 

In order to avoid this, the Government has ordered that in December, when the banana high season begins, exporters can sign an annual contract, which will guarantee the purchase price. 

The problem arises because between December and May the cost of a box can reach $12, but because of contracts a producer receives no more than $6.26. For this situation there are producers who do not sign contracts and when the price, on the contrary, becomes very low get into trouble and lower their productivity. 

The leader of the Association of Exporters of Bananas from Ecuador (AEBE), Eduardo Ledesma, stressed that it is therefore essential that the contracts be signed. 

He considers it illogical for producers to want to receive very high prices during the good times, and that the exporters solve their problems when the price falls. 

Julio Cruz, producer, who is part of the Association of Agricultural Producers Milagro-Chirijos, who produce about 5,000 boxes of fruit, agrees with this position. They respect the price and maintain permanent contracts. 

Cruz points out that in his sector only, there are about 300 producers who generate 70 boxes per week per hectare, and who have no signed contract. That means that during these months many have no income, which translates into disinvestment on farms, and low production. He is aware of the problem, but stresses that those same colleagues received $11 per box, between March and April. 

At present, exporters who do not have contracts signed buy the box at $3.40. But the problem is that the small farmers do not sell directly, but they do it through an intermediary, who takes part of the profit. 

Marum said that it should be the market that regulates the price and that what has to be done is to open the possibility for producers to earn more in the high season and put a cap on the off-season, but it should be reasonable. 

Farmers report that exporters charge at the official price, but it is not what they receive. On this point, Ledesma recommended that exporters who do not adhere to the rules are excluded and that contracts are required in order not to affect the market.

Publication date: 9/19/2017


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