Q&A: Impacts of Buenaventura port strike on produce trade

More News Opinion Top Stories
Q&A: Impacts of Buenaventura port strike on produce trade

After 22 days of protests from the disgruntled citizens of Buenaventura, feeling little economic benefit from the trade that flows in and out of one of Colombia's leading ports, a deal was struck with the national government to provide a range of benefits in areas including health, housing, clean water, education and energy. But for those in the fruit trade, especially those in the growing areas around Cali and the coffee-growing region circling Pereira, what has it meant? At Fresh Fruit Portal, we sought to find out more from Colombian Horticultural Association (Asohofrucol) managing director Álvaro Palacio. 

Asohofrucol managing director Álvaro Palacio

How important is Buenaventura as a port for Colombian fruit exports? 

The port of Buenaventura contributes to the development of exports in Colombia, however the ports of Turbo (Antioquia), Santa Marta (Magdalena) and Cartagena (Bolívar) represent 94.68% of national exports [largely due to bananas]. While Buenaventura is not the most relevant, it has a strategic location and serves to help many producers in the southwestern part of the country.

Exports of fresh and processed horticultural products from this port represent 1.98% of the national total in terms of value for 2016, or in other words US$22 million. There are products that mainly depend on this port for their exports, as with fresh pears. 

Would you be able to list the areas of production and crops most affected by the strike, with figures?

According to information in terms of value in May 2016, exports that took place in Buenaventura according to their origin were: the Cauca Valley (67.88%; US$1.54 million), Cauca (16.45%; US$374,300) and Risaralda (8.76%; US$199,377), and for that reason they are the areas that were most affected by the port strike. The products that felt the greatest impact were conserved mangoes, fresh pineapples, hearts of palm and papayas.

How much were the losses in general from the strike?

The activities registered in the port of Buenaventura for the month of May in 2016 were US$2 million in exports and US$23 million in imports. Projecting that information to the same month in 2017 it is estimated that the losses could be around US$20 million. 

What is the cost that growers and exporters have had to take on as a result of this conflict?

Additional costs for maritime freight in May could have ascended to US$2 million for exporters and importers. Exports in the month of May for fresh production had a potential loss of US$500,000 in value. 

How do these kinds of strikes affect the industry?

The first consequences of the port strike is the impact on budgets, logistics time and sales. For processed and conserved products, the cost of transport and storage increases along with changes in routes, bringing about in some cases an increase in prices for the final consumer.

That negatively affects industry development. In the case of fresh products, the risk is much higher as you could lose all your merchandise through ripening, exposing those who want to export economic bankruptcy.

Which market destinations were the most affected by this?

The destination countries most affected have been the United States (40%), Chile (26%) and the Netherlands (13%), as they are the places that receive the most imports with Buenaventura as the origin, according to figures from 2016. 

Finally, the local Colombian press ha reported an increase in prices for imported fruits such as fresh apples and grapes. What is the outlook in that sense and when do you expect prices to get back to normal again?

From January to April, 2017, imports of fresh apples and grapes saw an increase of 15.7% and 9.2% respectively year-on-year. At the same time, prices also rose by 0.08% for apples and 4.14% in grapes compared to the previous year.

In general, market values stabilize once international transit is back to normal with a prompt solution to national strikes leading to an equilibrium between the supply and demand of products. 

Figures derived from 'Hermanos Quintero – Plataforma SICEX'.


Subscribe to our newsletter