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1% annual tax reduction in China is a positive for Ecuadorian bananas

Speaking about the drop in Ecuadorian banana exports in 2022, Richard Salazar, executive director of the Banana Exporters Association (Acorbanec), explains that this was due to three factors: the war in Ukraine, the La Niña Phenomenon and a decrease in purchases by the European Union and the United States.

And this 2023 started for the sector with spot prices (value paid at the time of negotiation, according to supply and demand) on the rise. For Salazar, the Banana Law must be urgently reformed and enable spot sales. When asked about the opportunities he sees for the banana sector with the trade agreement with China, Salazar said: “It will be positive, because despite the fact that the results will be seen in 10 years, there will be an annual reduction of 1%. Currently, we pay a 10% tariff and in 10 years we will be at zero. China is presented as a strategically important market. Export growth for us is in East Asia, especially China, Japan and South Korea.”

“Currently, 3.1% of the total exported per year is sent to China, in 2022 we send 10.5 million boxes. The expectation is to triple or quadruple the current volume, we have already done it before, but space has been lost due to the effect of the tariff. There are countries, like the Philippines, that pay far less duty than we do.”

“The volume fell due to a slight decrease in purchases by two important destinations: the European Union, which reduced its purchases by 4%, and the United States, almost 1%. This happened because the competition also produced fewer bananas, and since there were not more fruits, they bought less, but it was also associated with economic problems, such as inflation.”

“In 2023, we aspire to an improvement in the competitiveness of the sector, which has been lost in the last two years due to high costs, both in security and taxes. The market scenario is a little better, they are paying us better for the fruit, but, unlike other years, the fruit in contract sales has only been around 35% of the exportable supply.”


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