On December 17, the Ministry of Agriculture and Livestock of Ecuador announced its full readiness to work on addressing the problems discovered with the supply of bananas to the Russian Federation and maintain its current volumes. As previously reported, the Rosselkhoznadzor is considering the possibility of introducing restrictions on the import of bananas from Ecuador following the detection of pests (polyphagous humpback fly) in some batches.
This would not only entail a ban on the import of 1.3-1.5 million tons of bananas (this is exactly how much Ecuador ships annually to the Russian Federation), but also the loss of about 6% of the global trade with this product. It should be recalled that Russia is the second largest importer of bananas in the world, second only to the United States. Every year, the Russian Federation purchases between 1.2 and 1.6 million tons of the product, with Ecuador accounting for between 96% and 99%.
For its part, Ecuador is a world leader in the export of bananas, accounting for about 27% of the world trade with this product, although its share in the global production stands at a modest 5%. Each year, the country exports 6-6.8 million tons of bananas worth $ 2.8-3.2 billion. For Ecuador, Russia is also a key trading partner, although the share of the Russian Federation in Ecuadorian exports is somewhat less significant. So, of the 6.8 million tons of banana exports from Ecuador, about 22% was intended for the Russian market.
In general, one and a half million tons of bananas is such a huge volume that Russian importers are not seriously considering the reality of introducing such a ban, since there are practically no alternative suppliers on the world market.
The main competitors of Ecuador in the world market are the Philippines, Guatemala, Costa Rica and Colombia. In 2018, these countries exported 3.4 million tons, 2.6 million tons, 2.5 million tons and 1.9 million tons of bananas, respectively. In 2018, Russian importers purchased only 22 thousand tons from Costa Rica, 12.5 thousand tons from Guatemala, 12 thousand tons from Mexico, another 12 thousand from Colombia, and 1.5 thousand tons from the Philippines.
At present, Ecuador remains a key supplier of bananas to the Russian market. According to the Rosselkhoznadzor, the export volume in the first 10 months of 2019 amounted to 1.2 million tons. Based on preliminary prospects, imports from Ecuador may fall slightly this year compared to the previous few campaigns, mostly due to a reduction in the country's banana production, the spread of diseases on plantations and the riots in October this year.
As a result, banana prices in Russia in ruble terms have begun to break all-time records since the end of May this year. In Moscow, they now range between 63 and 75 rubles / kg ($ 1.01-1.20 / kg). Against the backdrop of these record prices, traders claim that there's a fairly low demand for the fruit and prefer to work with citrus.
Citrus prices are also quite high compared to previous years. Last week in Moscow, the wholesale prices paid for oranges and mandarins stood at 60-110 rubles / kg ($ 0.96-1.76 / kg) and 65-110 rubles / kg ($ 1.04-1.76 / kg), respectively.
Source: east-fruit.com
