Ecuadorian bananas: European market 'no longer profitable'

November 14 , 2019

The head of the Ecuadorian banana growers' association has said that the poor prices in the European market are not sustainable for the industry.

"Europe is no longer a profitable market," Richard Salazar, executive director of ACORBANEC, told FreshFruitPortal.com.

He said this is due to a consumer preference for cheaper bananas, despite shoppers' supposed interest in sustainability.

"We want to be sustainable, but to be sustainable we would have to raise prices," added Salazar.

“Unfortunately, Europe has transformed into a price market. The consumer is accustomed to paying for a cheap banana."

He added that the certification requirements are quite strict and are not necessarily reflected in the prices. That is the message that the Ecuadorian banana industry wants to give retailers and consumers, he said.

“More and more is being asked of the productive sector. We have to respect the environment, pay decent salaries and everything. But the Ecuadorian banana industry also requires better prices for its fruit in export markets to make the business sustainable."

Minimum pricing for Ecuadorian bananas in 2020

Meanwhile, Ecuador's Agriculture Minister recently increased the minimum banana prices for 2019-20. This is the pricing floor for what exporters pay to growers.

The prices for this year reflect investments in preventing the entrance of the Fusarium Wilt TR4 disease from Colombia. The Ecuadorian government set prices to US$6.4 per box of 41.5 -43 pounds. 

"In contrast to other years, I think that it has been set in a way that is more technical than political," he said.

“While it is true that there was an increase and one might think that this impacts our competitivity, it is also a message to the world."

Salazar explained that “[TR4] is a latent threat ... so we had to invest to establish prevention measures so that the fungus wouldn’t reach our crops”. 

He added that while Europe would likely buy fewer Ecuadorian bananas in 2020, trade would still continue. 

“Because replacing Ecuador in Europe would be complicated. Ecuador exports 1.6 million metric tons (MT) to Europe. There is nowhere else in Latin America that has that production capacity,” he added.

 

Comments