Normally this period is the low season for Ecuadorian bananas, which means there is less production available. “This year we have the worst combination ever: a low season combined with high production. Due to weather issues, we now have volumes, which we were supposed to have in the beginning of the year. There is also more supply of bananas coming from Colombia, Costa Rica, Guatemala, the Philippines, etc. More volume and less demand resulted in prices falling below average. We have had to find new channels to sell our bananas.”
The lower prices have other consequences. Hugo: “Producers receive less money, which means they are not able to make the necessary investments in their production. We believe this will consequently lead to a lower supply availability at the end of this year, and beginning of next year. While this period is supposed to be our high season, and you should have as many bananas available as possible.”
“The Ecuador market has some dependency on the production in the Central American countries. If they happen to have big volumes, the Ecuadorian market may collapse completely as Central America benefits from lower logistics costs, to transport their bananas to Europe and the United States. This pushes us to look for competitive advantages, such a customized packaging and exporting to niche markets”, says Hugo.
Asia Fruit Logistica
The Asian market as well as the exhibition Asia Fruit Logistica in Hong Kong is important for GinaFruit S.A. According to Hugo there is an increased demand from Asian countries for Ecuadorian bananas. “As for example, the Philippines still have production problems. Countries such as Japan, Singapore and South Korea demand high quality. Even though the Philippines is in production, they can't offer the required quality or only have supply of high quality bananas for a few months per year.”
He continues explaining that these countries often search for other opportunities. “Ecuador can offer a stable and sustainable product all year round, which is to our advantage. The same is happening with other new export destinations, such as Iran, Iraq, Dubai, and Kazakhstan. Normally India and the Philippines supply these countries. Now they have tried Ecuadorian bananas, and even though the transit time is long, we can still offer a stable product of high quality. These countries are huge, so we expect a big demand coming from them.”
Company expansion
GinaFruit S.A. is a growing company with 4 generations working in the production and 6 years of export experience. The company started with 1 container per week, to over a hundred containers each week. However, the company is in the middle of a big expansion project. “The idea is to buy more farms and increase our production with at least 1000 hectares more. At this moment we've reached 20% of it, but we expect to reach 50% by the end of this year. Hopefully, we can achieve our goal by the end of 2018”, said Hugo proudly.
As each country has their own restrictions and requirements, Hugo explains that they customize their farms to the need of the customers. “This involves a lot of investment and effort on the field, however, it also gives us the necessary competitive advantages to stay on top. At this moment we are in the 14th position on the ranking list of all Ecuadorian exporting companies (for volume), but we hope to get into the top 10.
Ginafruit is present at the Asia Fruit Logistica in Hong kong, Hall 5b E-15.
For more information:
Hugo Alfredo Castro
GinaFruit
T: + 593 999423369
E: gerencia@ginafruit.com.ec
www.ginafruit.com.ec