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Division between Ecuadorian banana producers and exporters

The National Federation of Banana Producers' (Fenabe) proposal to freeze Ecuadorian banana production for three weeks to regulate supply in the market and achieve a recovery in prices has generated a division between the producer and exporter sectors, represented by the Association of Banana Marketing and Exportation (Acorbanec) and the Association of Banana Exporters of Ecuador (Aebe), which refuses to suspend shipments.

Byron Paredes, the president of the Association of Banana Producers of Ecuador, assured that the measure would improve the price of the box of bananas, as there are markets that have restricted purchases because of the world health crisis and now there is a surplus of fruit.

In April, the spot banana box is being traded at $ 2.50; i.e. almost $ 3.50 less than in January. However, this value only refers to bananas sold without a contract, because producers who have contracts with importers are paid $ 6.40 per box.

Nearly 60% of exporters operate on contracts that have been negotiated in advance. So the low price issue only affects those who sell spot bananas, Aebe stated.

Aebe and Acorbanec do not deny that there is an oversupply of bananas, but they estimate that exports could be reduced by 30% and not entirely.

But is there less demand for bananas?
Important Ecuadorian banana markets, such as China, Russia, countries of the European Union, and the Middle East have reduced or stopped their purchases due to logistical problems caused by the pandemic.

The situation was different in January 2020, when the country exported more than 37 million boxes of bananas, i.e. 18% more than in the same month of 2019.

"It was a record export, but at the end of January, the restrictions on purchasing from China began," Acorbanec stated.

In March, other countries, such as Turkey, which is the gateway for Ecuadorian bananas to the Middle East, closed their borders because of the quarantine.

The first effects of the COVID-19 crisis for the export sector will be felt in late April, when, according to projections, there will be a 30% decrease in exports.



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