Banana producers and exporters put aside their differences and met to find a solution to the banana oversupply that was created in the market after Russia's invasion of Ukraine and the outbreak of war, agreeing on the need to start disposing of the surplus fruit that cannot reach the countries in conflict. The most immediate option they analyzed was donating it to the domestic market, in order to prevent prices from continuing to fall.
As proposed, the fruit will be delivered to public and private entities that promote food programs; another part will be used as organic fertilizer for the crops in the same farms. However, both sides are still seeking to define a mechanism.
For the time being, the exporting sector has accepted the producers' request of paying them something for the bunches that could not be exported. Richard Salazar, Executive Director of the Banana Marketing and Export Association (Acorbanec), has proposed that this payment be made to producers who have a contract.
This week, Acorbanec alone would have the ability to recruit and donate at least 480,000 boxes of fruit. The idea is to regulate supply and prevent bananas from being exported at low prices, something that is already happening, Salazar stated. "The problem is that some foreign customers were taking advantage of the situation in Ecuador to buy the product at a lower value: between $2 or $3 per box in the spot markets. This would send a message to importers; it would let them know that no more fruit will come out at low prices, that we prefer to keep it in the country and donate it."
Up until yesterday afternoon, the main managers of the National Federation of Banana Producers (Fenabe) continued to analyze the feasibility of this proposal. Segundo Solano, a spokesman for the guild, said that one of the issues that still needed to be determined was the value they would receive for each cluster. The situation in the market has become so complicated that, in recent weeks, some producers have had to accept being paid $1.20 per box, he added. "That can't continue to happen when there is a law that establishes a support price of $6.25," he said.
These alternatives come weeks after the Government refused to intervene to find a solution to the problem. The government said it couldn't nationalize the losses a private business has had because of the war, which includes other sectors such as the floricultural or shrimp industry.