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Speaking the local language makes trading in South America easier

The banana situation is rather dire and there is a huge gap between prices at origin and the Italian/European market. Ecuador drives the entire segment as, despite its high production, it manages to place all of it. The Russians are loading a lot of produce, so they occupy a leading position. Multinationals such as Chiquita, Dole and Del Monte are contract based and then there are various exporters and importers shipping mainly to Arab countries.

"Prices in Ecuador are prohibitive, also due to the high speculation. Last week, FOB prices were of $17-18. Buying for 18 dollars and selling at 16 is no good business for the European market. This is why you don't see many bananas from Ecuador on the Italian/European market," explains Emanuele Zardetto (in the photo) from 
Zardetto Trading, a family business that has been importing and exporting bananas from South America for the past 12 years. "In addition to being half South-American, I have been to producer countries such as Ecuador, Costa Rica and Colombia multiple times and will soon visit Mexico as well." 

"It is one of the weirdest years ever for bananas. Of course those who had signed contracts with Ecuador in December for $9.50 FOB cannot comply with them. Exporters are therefore facing difficulties too. This is why many have chosen other origins such as Mexico and Colombia. It wasn't easy to find the produce. We had to stop loads from Costa Rica as the fruit had been damaged by the floods. As for Colombia, there are few volumes available via small independent exporters at more reasonable prices. Shipments from Mexico are more manageable as well."

According to the importer, the situation should last for at least another month and a half. "Then weather conditions are expected to improve, so production should increase. Prices will continue to remain high until late March/early April. April should be a good month for sales, with good demand."

Bear in mind that, in Italy, bananas sell well until early June, then consumption drops. "We need to take advantage of the positive period, survive summer and pick things up in September for the end of the year."

The price of green bananas on the spot market has increased quickly. When asked whether the same is expected in Europe for yellow bananas, the importer replied: "the yellow banana market is rather peculiar, as it follows supermarket trends. It's always a risk to work with the retail segment, as you never know whether programmes will change. This is why we prefer working with green bananas."

"It's quite a serious problem, especially in Mexico, while the situation is more under control in Ecuador. It could spread or worsen should it rain more. The monsoon season has started three-four weeks ago in Ecuador and any problem will only manifest itself in May. In Mexico, problems started a month and a half ago on the Pacific side (Manzanillo) but are expected to improve. The situation is more under control on the Atlantic side (Veracruz) where temperatures and volumes are low." Sigatoka does not cause big problems in Costa Rica and Colombia.

According to Emanuele, the North-African market is rather interesting. "For example, we are shipping produce to Tunisia: clients are difficult but are excellent banana consumers. Northern Europe is another important destination. Rotterdam and Antwerp are a good channel to reach Eastern European markets, which are large banana consumers as well. There is less competition there and clients are very reliable and quick payers. Many would like to load directly, but logistics in Adriatic ports is more difficult." 

In Italy, Zardetto Trading currently unloads Colombian bananas in the Livorno port and imports from Mexico are also expected. "We prefer selling outside of Italy anyway, as the domestic market is harder to manage." Emanuele is convinced the Civitavecchia port is one of the best for commercialisation, while Gioia Tauro is the worst.

"Container transports were much more complicated in 2005-2006. Only a few companies entered the Mediterranean (Maersk and a few smaller ones). MSC has grown a lot over the past few years. It now only takes 24 days to reach Tunisia, though there are some complicated routes. Transit times are longer for some Arab countries and special containers are needed."

The once-famous banana ships that loaded loose bananas are no longer used. "No operator wants to risk entire ships."

Speaking the local language a plus
"We established strong relationships with producer cooperatives, so we can supply the best quality at a fair price. We check bananas ourselves with special visits and via local teams. Speaking the local language, and even the local dialect, means you are treated better."

The company
"We are very flexible and try to meet our clients' needs with services available 24/7. We sell at spot market or fixed prices for six-month or yearly contracts, at FOB/CIF conditions but also at T2 FOT all inclusive conditions on the European market. We export our produce to Italy, Belgium, the Netherlands, Poland, Russia, Albania, Serbia, Bulgaria, Egypt, Tunisia and Jordan using leading companies such as MARFRET, msc AND Maersk."

Emanuele Zardetto - Italian sales manager
Zardetto Trading srl
Via Lamarmora 1
31015 Conegliano (TV)
Tel.: +39 438 250779
Fax: +39 438 250779
Email1: office@zardettotrading.com
Email2: logistic@zardettotrading.com
Web: www.zardettotrading.com
Skype: emanuelezardetto

Publication date: 3/1/2018


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