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In the last four years, Ecuadorian banana spot prices have been substantially higher than contract prices

Ecuador's Ministry of Agriculture and Livestock (MAG) agreed to leave open the possibility of lowering or raising the support price of the banana box, which was set at 6.40 dollars for the 43-pound box in 2020, to benefit the sector and according to the development of the foreign market, provided that the average price was the one established for the entire 2020. In other words, since the end of 2019, they already expected that different situations -such as the current low demand - could cause controversies between producers and exporters at this time of year.

The spot price currently only reaches up to $ 2.50, but many producers who sell under this modality accept these conditions. “We know how the market is, and when we accepted it we knew the risks; we also know that the situation can improve,” said a producer from Quevedo.

However, in the high season, the spot price for a box can exceed $ 17. In fact, in the last four years, the banana's average spot price has been substantially higher than the contract price. According to Acorbanec data, in 2016 it was $ 6.60, in 2017 it was $ 7.05, in 2018 it stood at $ 6.60, and in 2019 amounted to $ 6.85. These prices were all higher than the official support price.

The law indicates that the MAG will sanction the exporters that do not meet the conditions stipulated for those who have contracts. Both Jose Antonio Hidalgo, executive director of the Association of Banana Exporters (AEBE), and Richard Salazar, of Acorbanec, have highlighted the legal mechanisms that producers who feel harmed have at their disposal.

"The law establishes a mechanism for filing lawsuits with the MAG's Banana Unit," Hidalgo stated. To do this you must present your invoices, your RUC.

Producers' complaints about low prices have been recurrent for 30 years, however, the special legislation on bananas has not been modified. In fact, up to two decades ago, the leaders of El Oro and Los Rios closed the roads to those provinces as a protest measure. Despite the protests, the banana industry has not stopped growing.

 

Source: expreso.ec 


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