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Ecuador: Banana box pricing agreement is infringed

There are problems brewing for the banana business at El Oro where exporters continue to disrespect the law defining the sole annual contracts for the purchase of fruit, while, last week, the spot price stood at $2 dollars per box.

Small and medium producers from Machala, Pasaje, El Guabo, Santa Rosa and Arenillas expressed growing concern and demanded the Ministry of Agriculture, Livestock, Aquaculture and Fisheries reactivate controls to punish those who persist in their intent to collapse the activity.

The spot contract banana box was quoted last week at two dollars while exporters were disrespecting the law that set the official rate for the banana box at $ 6 for the 52 weeks of the year.

The 4,356 farmers who grow the fruit at El Oro in 641,110,1 hectares, equivalent to 15.6% of the national total, distributed in 45.1% in Los Rios, Guayas 30.1%, 4.1% at Cotopaxi and 5.1% in other provinces, are being affected by both factors. Those affected argue that most of the 333 banana exporters operating in the country, according to the official sector, fail to comply with the laws and regulations. The Magap, however, argues that the official sector exerts controls to ensure compliance with the law.
They argue that the sentencing, weeks ago, of several exporting companies that broke the law apparently hasn't yielded the expected results as abuses grew and multiplied directly affecting the small and medium producers. They showed their desperation and growing discontent because exporters are paying the prices that they please, controls have been suspended and companies continue amassing large profits. "It's incredible that a box of bananas costs less than a pack of cigarettes and that those responsible of exercising controls to apply the commands keep failing to do so," they said.

"It's a critical situation. Production costs are increasing in a banana market that is avid for incentives to continue producing in equal, balanced and stable terms," they argued. They also said that banana producer organizations should intervene in order to find out how the measures applied by the public sector to those who were caught red-handed in breach of the law were faring.


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