Ecuador's U.S.-bound banana exports halve as EU trade deal comes into effect

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Ecuador's U.S.-bound banana exports halve as EU trade deal comes into effect

Ecuador's recent accession to a trade deal with the European Union (EU) combined with heavy Central American exports to the U.S. have caused significant changes to banana shipments from the world's leading exporter. 

Ecuador joined Colombia and Peru in the agreement that came into effect on Jan. 1, eliminating high tariffs and tackling technical barriers to trade.

Speaking to Fresh Fruit Portal, Ecuadorian Banana Exporters' Association (AEBE) president Eduardo Ledesma said the benefits of trade deal were already being felt.

He explained there had been a large uptick in volumes shipped to Europe, especially the Mediterranean countries like Italy, France, Spain and Portugal, while exports to the U.S. were far lower year-on-year.

"Last year [up until now] we had shipped 7.6 million boxes to Europe and we're now at 9.3 million," he said.

"This has been a significant increase which has come about thanks to the agreement, and which is compensating for the fall that we have had in the U.S., where by this time last year we had shipped 12 million boxes. Now we have hardly exported more than 6 million boxes - about half."

Total year-on-year banana exports from Ecuador as of week 15 were around 2% up, with 101 million boxes. 

Ledesma says that much of what would have been shipped to the U.S. market ended up in Europe and Russia.

Figures from the Central Bank of Ecuador show that Europe-bound exports over January and February 2017 were 28% higher year-on-year at 394,452 metric tons (MT).

Italy received the greatest volumes of Ecuadorian bananas over the two months, with volumes rising 138% year-on-year to around 110,737MT, and shipments to France also rose from a low base of just 297MT last year to 2,363MT.

A similar situation was seen in Spain, where volumes more than tripled to 267MT, and Portugal, where trade doubled to 826MT.

As for the U.S. market - where volumes have dropped 42% year-on-year to 159,351MT, according to the U.S. Department of Agriculture (USDA) - Ledesma said increased banana exports from the likes of Guatemala and Costa Rica had affected the trade dynamics.

"Guatemala has very high productivity in terms of tons per hectare and that is one of the reasons why Ecuador is losing ground in the U.S. market," he said.

He said as production costs were far higher in Ecuador than Guatemala, it was harder for exporters to compete in international markets.


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