Ecuador's share of U.S. banana market saw sharp decline in 2017 - FreshFruitPortal.com

Ecuador's share of U.S. banana market saw sharp decline in 2017

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Ecuador's share of U.S. banana market saw sharp decline in 2017

Ecuador's share of the U.S. banana market fell by a third year-on-year in 2017, which an industry representative has attributed partly to the lower prices of fruit from its Central American competitors. 

Figures from the Ecuadorian Banana Export and Marketing Association (Acorbanec) show the country's share of the U.S. market was 10% last year - marking a 33% drop.

In tandem with this decline, U.S. banana imports from other countries in the Americas have risen, according to Acorbanec executive director Richard Salazar.

Salazar said one of the main reasons behind this was that while restrictions in Ecuador limited the amount of new plantings, Costa Rica and Guatemala have been expanding their industries and selling their fruit at more competitive prices.

"Guatemala has been taking more share of the U.S. market for various reasons, mainly because its plantations are relatively new, with new technology and quite high productivity," he said.

He also explained that the relative proximity of the competitors to the U.S. - along with not having to use the Panama Canal - helped them to achieve better returns.

"20 years ago Ecuador sent more than 75% of its exports to the U.S. and the European Union, and since then new players have appeared and grown with new plantings, especially Colombia, Costa Rica, Guatemala and even the Philippines," Salazar said.

This situation has forced Ecuador to diversify its markets, Salazar said, and the EU is now the country's leading destination.

On Jan. 1 2017 Ecuador joined Colombia and Peru in a trade deal with the EU, eliminating high tariffs and tackling technical barriers to trade. By May last year EU-bound exports were already 22% up year-on-year at 9.3 million boxes, while total exports from the country had only increased 2%.

"[Our accession to the trade agreement] improved access with regards to the import tariffs and put us nearly on an equal footing with our competitors," he said.

Salazar also highlighted the importance of the 'loyal' Russian market for Ecuadorian exporters.

Ecuadorian Banana Exporters Association (AEBE) president Eduardo Ledesma urged the government to boost the country's competitivity in international markets by negotiating agreements to lower import duties for Asian destinations like Japan, South Korea and China.

"Ecuador is going to be able to export greater volumes and it's going to be necessary to increase productivity, since at the moment we are at 1,900-2,000 boxes per hectare whereas Guatemala and other countries are between 3,500-4,500 boxes per hectare," he said.

In addition to increasing productivity, Ledesma said another goal was focusing more on organic and Fairtrade certifications.

On the current restrictions relating to new banana plantings, Ledesma said: "It is likely that, in virtue of this new scenario, the restrictions will be modified to allow a greater surface area of banana plantations, and I think this could change the outlook of the other countries that are planting more."

Photo: www.shutterstock.com

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