Banana sales from Ecuador to the European Union are decreasing due to competition of other South American countries, especially Guatemala.
This trend is clear in the exports figures of 2019: in the first quarter of the year banana exports to the EU fell by 15.45% over the same period of the previous season, according to the latest report of the Banana Marketing and Export Association (Acorbanec). The Trade Agreement that the European Union has with other Central American countries allowed the competition to reduce the price of their boxes of bananas by $ 0.50 compared to Ecuador, so Guatemala, Costa Rica and Colombia are displacing Ecuador from the markets of the United States and the EU, which pay better for the fruit.
As a result, the majority of the Ecuadorian production is being sent to emerging markets that acquire bananas through spot contracts (short term) and in periods of the year that are unusual for exporters. East Asia stands out among these new markets for Ecuadorian bananas, as banana exports to this destination grew by 59.91% in the first quarter, in relation to the same period of 2018. Meanwhile, exports to Russia grew by 5.38%.
The cultivation of bananas and plantains is of great importance for Ecuador's economy, so much so that the government has institutionalized it through a bill called the Banana Law, which regulates the production of bananas, plantains, orito, and other musaceas. According to the associations of producers, that proposal has aspects that harm the export and producing sectors, such as the prohibition to extend the sowing of the fruit. "Ecuador should allow the controlled planting of new hectares, since Guatemala has won a very important part of the market to the country in the United States," people from the sector stated.
The representatives of the producers have proposed the Government improve the commercial regulations to improve banana production.
Moreover, talks with Brazil about the claim made by Ecuador to the World Trade Organization for the restrictions on the entry of fruit to that country continue to advance, and the problem is expected to be solved within six months.