Just a few hours before the end of the first month of the year, the number of signed contracts for banana exports in the remainder of 2024 had hardly experienced significant changes. On January 19, the Minister of Agriculture and Livestock (MAG), Danilo Palacios, announced that 58% of the registered hectares had already signed contracts. Ten days after, the executive director of the Association of Banana Marketers and Exporters of Ecuador (Acorbanec), Richard Salazar, reported that only 59% had been signed.
Despite the preference for contracts, a part of the Ecuadorian banana is sent informally as the average price of the spot market has constantly exceeded the minimum support price (MSP) set as the basis for contracts. For example, in 2023 the average spot price was $7.20. Meanwhile, the MSP stood at $6.50. Likewise, the average spot price of 2023 also exceeds the MSP established for 2024, which is $6.85.
The MSP for 2024 has been an obstacle to the signing of contracts, especially with European buyers, who do not agree with the increase of $0.35 per box this year. That's why Salazar sees the Fruit Logistica, which will be held in Berlin from February 7 to 9, as an opportunity to close these deals.
Salazar expects that -even though the European market, especially supermarkets, is sensitive to price hikes- sustainability will be a compelling argument in the negotiations in Berlin. He stressed that the costs associated with European demands, such as living wages and certifications, must be covered, and the idea is that these costs translate into profitability to maintain sustainability.
José Antonio Hidalgo, executive president of the Association of Banana Exporters of Ecuador (AEBE), stressed that each negotiation is independent and responds to the expectations of each exporter and supermarket. The sector aspires supermarket chains to pay according to the Fair Trade methodology, which guarantees a price that covers all costs, including certifications, to ensure sustainability.
Hidalgo acknowledges that the number of contracts signed with supermarkets was down due to the refusal of European customers to pay more for the fruit in 2024. He also said they would handle this situation via a campaign of shared responsibility. At Fruit Logistica, 43 organizations from Ecuador, including AEBE and the Provincial Prefecture of Pichincha, will seek to learn about marketing policies and consumer concerns in the European Union.
Finally, José Antonio Hidalgo highlighted the positive expectations and revealed that Ecuadorian banana exports exceeded 1.5 million tons in the best year since 2020.
Source: eluniverso.com