Ecuador's banana sector is speculating about the benefits that the agreement the country is about to sign with the European Union will bring for them. The agreement has a protocol that would favor importers and exporters of Ecuadorian bananas. The tariff difference with other Latin American countries would go from 50 cents per box to less than 2 cents per box. The agreement should be signed and approved next week, and enter into force starting January 1, 2017.
"Ecuador had an agreement in which many products entered the EU without tariffs, but the bananas were subject to a high tariff in order to protect the EU's local production. Ecuadorian bananas have been paying high tariffs for 4 years, which have resulted in the reduction of their market, "said the president of the Association of Banana Exporters of Ecuador, Eduardo Ledesma Garcia.
Ecuador's market share in the international trade of bananas went from 40% to 30% within a couple of years, a window that was exploited by other Latin American countries that seized the opportunity to market their product. "Now our bananas will pay almost the same tariff as our competitors. However, it's also important to stress that this is a measure that also benefits importers, as they will now have the opportunity to regain the market share they had lost," he said.
"There's been some confusion among some producers who believe this 50-cent saving is as a monetary benefit for exporters. In reality, it will benefit importers, who will be able to buy a box of bananas for a price that is equivalent to that of the competition. Despite this reduction, Ecuadorian bananas will continue to be more expensive than the bananas from other markets because of logistical reasons. Thus, our next challenge will be to have an appropriate strategy," Ledesma said.
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Eduardo Ledesma GarciaAEBE
Association of Banana Exporters of Ecuador