Ecuadorian govt steps in to end banana price impasse

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Ecuadorian govt steps in to end banana price impasse

The Ecudarion government has unilaterally decided the 2012 default average price of a box of bananas, following the failure of growers and exporters to reach an agreement, website reported.

Ecuadorian Agricultural Minister Staynley Vera

Agricultural Minister Staynley Vera said the new price at US$5.50 was on a take it or leave it basis.

"If you don't like the decision, which we have made to benefit the sector, then the government will withdraw and the price will change according to market forces," he was quoted as saying.

Payment for the high season in the first 22 weeks will be at US$6.25 and for the remaining 30 weeks, the low season, it will drop to US$4.90.

Vera said more would be paid at the beginning of the season to give producers greater liquidity to sustain production levels in the low season when international prices plummet.

"We know that the production cost is US$4.50 and with an extra 40 cents a case this will help sustain farming operations."

The minister said the new arrangement for 2012 would be more sensitive to export levels and market realities.

Generally, more than half of Ecuador's bananas are exported from January to May and the rest in the following 30 weeks.

He said the government would be tough on monitoring the new scheme and would enforce stiffer penalties for those who breached it.

"We will be more demanding in terms of information, for example producers' records, shipping notifications, among others," he was quoted as saying.

Vera added if the international market situation improved then the scheme could change in the future.

Producers and exporters were deadlocked over deciding a price for next year with growers asking for at least US$5.50 and exporters keen for the price to drop to US$5.05.

Related stories: Ecuadorian banana growers and exporters deadlocked over price

Ecuadorian growers push for a higher price


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