The new scheme for setting the price of a box of bananas for export in Ecuador, which was approved by the Ministry of Agriculture and Livestock (MAG) at the end of October 2020, came into force on January 1, 2021. Producers will be able to sign contracts with an annual weighted average price that is equivalent to the minimum support price of $ 6.25 - a price that is lower than the $ 6.40 it stood at in 2020 - or benefit from a table of four minimum prices based on the season.
In this last option, the 22XU banana box (18.14 kg) will cost $ 6.90 from week 1 to week 16. From weeks 17 to 32 it will cost 6.60, from weeks 33 to 42, it will stand at 4.50 dollars, and from weeks 43 to 52, it will cost 6.40 dollars.
The MAG justified this change noting that the Ecuadorian banana sector had faced different challenges, such as the arrival of the Fusarium R4 fungus in Latin America and the COVID-19 pandemic, which changed the dynamics of demand in consumer countries.
The export sector began to negotiate contracts for the fruit with its destination markets in November of last year, closing many deals with the United States, stated Richard Salazar, the executive director of the Banana Marketing and Export Association. (Acorbanec).
"We have no problems with the United States, as contracts are being signed," the leader said. However, he said, they have had difficulties closing deals with Eastern Europe, Russia, the Middle East, and Africa, because these markets seek to buy the fruit at a lower price and prefer to do it under the spot modality and not under contracts.
Salazar also said that Ecuador had exported 347.48 million boxes of bananas between January and November of 2020. This is 7.07% more than in the same period of 2019, and a higher volume than in the same periods of 2018, 2017, and 2016. This was due to the increase in the exportable supply, as well as the increase in demand in the different destination markets, with the exception of the United States, East Asia, and Oceania.