The consequences of the war in Ukraine on Ecuador's banana sector continue to grow as the days go by. According to figures revealed by Richard Salazar, the executive director of the Banana Marketing and Export Association (Acorbanec), Ecuador exported an estimated 5 million boxes less bananas in the 5 weeks since the war started. It should be noted that Russia and Ukraine account for 25 percent of Ecuador's total banana exports.
The magnitude of these figures is even more evident when compared to 2021 exports. Last year Ecuador exported 376 million boxes of bananas abroad. That is approximately 10 million boxes or 2.5% less than in 2020.
In other words, in just 5 weeks Ecuador has stopped exporting 50% of what it stopped exporting to all destinations throughout 2021.
The impact is also reflected in the tax coffers
Jose Antonio Hidalgo, executive director of the Association of Banana Exporters of Ecuador (AEBE), said that in the first four weeks of the conflict the amount in taxes paid to the government for the banana exported to Russia had decreased by 23%, about $92,000. Meanwhile, the taxes for the banana that is sent to Ukraine decreased by 86% ($79,000).
In total, after four weeks of the conflict, i.e. around March 24, the state had lost 65.88% ($171,000) in taxes.
The situation has not improved. The government is considering the possibility of placing the fruit that was not exported in other markets, such as China or South Korea, but so far this has not happened. This was always a utopian proposal, Salazar stated.
“No new markets were opened. What happened was that the other markets, especially the spot markets, knew we were no longer exporting to Russia and Ukraine so they began to demand bananas but at much lower prices, that is, importers are taking advantage of the situation and pushing to buy at low prices,” the executive director of Acorbanec stated.