Spot price overtook the contract price
The Ecuadorian spot market in 2017 is closing well above expectations to reach an edge over the official price ($6.26). The average yearly price will end up around 12% to 15% higher than the minimum level suggested by local authorities.
This year high season for Ecuadorian banana prices lasted until week 25 and the low season lasted no more than 15 weeks to return to levels above the official price, until the end of the year.
This has caused many growers to delay negotiations with exporters for 2018 with the expectation of continuing to capitalize on the high price opportunities. There is still a lot of uncertainty in the market, but the exporters have already put together their strategies to advance the negotiations and will be able to supply their commitments in outside markets.
This is also the case for Freskita Bananas. Despite starting our exports just at the beginning of this year, we are foreseeing an aggressive growth for 2018. That growth includes a significant share of our exports under contracts.
The key to developing a long-term partnership with trusted growers is to comply with agreed commitments, manage cashflow intelligently to meet payment deadlines, maintain price and volume during the low season and go beyond a buying relationship to become a cooperative relationship in production with quality standards that results in higher productivity and the grower feels the benefits.
The competition is very strong, there are large American multinationals, Russian companies with big volumes and, of course, the Europeans who do not want to be left behind. However, there’s also space for Ecuadorian companies who embrace the competition with high quality service and product and that are always ready to innovate in their processes as Freskita is. We are very optimistic about the upcoming year.
Pedro Carbo 1014 of 103
Guayaquil – Ecuador
T: +593 994047725
Publication date: 1/3/2018
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