The difficult situation that the banana sector in Ecuador is going through due to the drop in income as a consequence of the world health crisis has forced the productive sector to decide to stop sales for three weeks to end the oversupply of fruit there is in the market and stabilize prices. In exchange, the sector has offered to donate the unsold fruit to support the Ecuadorian population in the current emergency caused by the COVID-19.
Representatives of the National Banana Federation of Ecuador (Fenabe), which groups around twenty producer unions from all over the country, have already made this proposal official. Through a letter addressed to the Presidency of the Republic, the sector has asked authorities to help them distribute the supply they won't export during these 3 weeks, estimated at 18 million bunches.
The measure is harsh, but producers consider it necessary in the current scenario, which is characterized by greater domestic demand for food and by international purchase restrictions that have caused prices to drop: as the official value of a 41-pound box is $6.40, but farmers currently receive a maximum of $2.50. Byron Paredes, the president of the Association of Banana Growers of Ecuador, said that this means producers are working at a loss. "Instead of giving it away abroad, we prefer to donate it here," he said.
Exporters are concerned about the future. Richard Salazar, the director of the Banana Marketing and Export Association (Acorbanec), said that logistics and distribution problems in several important markets, such as Russia and EU countries, have been generating a reduction in purchases. In January, the country managed to place 37.6 million boxes, but in February and March, these dropped to 33 and 30 million, respectively. However, the biggest decline is expected in April, the month shipments are forecast to drop by as much as 30%.
"Withdrawing our supply from the market seems like a good idea, but we do not agree with withdrawing 100% of the supply," said Richard Salazar.