Ecuador’s banana industry rejects plan for 2 fixed prices -

Ecuador’s banana industry rejects plan for 2 fixed prices

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Ecuador’s banana industry rejects plan for 2 fixed prices

Banana growers and exporters in Ecuador rejected a proposal to set two minimum prices for the fruit based on the high or low season, saying it would cause conflict between the two groups, according to the El Telegrafo newspaper of Guayaquil.

The objections came during a meeting with Agriculture official Rafael Guerrero about reforms to Ecuador’s Banana Law, which still must be approved by President Rafael Correa.

The price proposal called for a fixed amount to sustain the price of a box of bananas. In the high season, from December to May, there would be one price equivalent to 65% of the cost of production. In the low season, from June to November, the price would be 5% of production costs.

Eduardo Ledesma, executive director of the Association of Banana Exporters of Ecuador, called the reform “counterproductive” because it would affect production levels and cause conflict between growers and exporters. So Ledesma urged authorities to fix one price yearly and better controls to ensure its application.

Currently the price for a box of bananas is US $5.40. In the next few days, a panel of five growers and five exporters will meet to set the price for 2011.

However, the price is not respected and a box of the fruit sells up to US $2 less than the official cost, Ledesma said.

Grower Jorge Encalada agrees, saying that “the price is not respected and worst of all is that there are no sanctions.”

Simón Cañarte, former president of the Chamber of Agriculture of Litoral and a banana grower, said that the approach of two annual prices is inconvenient because in the second semester of the year, banana production falls because of climate and if the fruit sold at a lower prices, the tool would not cover the production costs. “This would affect fertilization and phytosanitary controls,” he said.

Guerrero said all the observations collected at the meeting would be given to the president. “There is a consensus for fixing one price annually for a box of bananas and that is what we will tell the president,” he said.

The Banana Law, introduced last month, would require growers, marketers and exporters to sign contracts for sale and purchase and respect them in order to export. It also would raise the fines for failing to pay for fruit.



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