Banana contracts fell due to the effects of the covid-19

Thanks to the increase in investments made by the banana sector during 2019, production and exports increased in 2020.

Banana contracts fell due to the effects of the covid-19

The sector planted around 4,000 new hectares and replanted 4,000 more that began to produce  in 2020.
The result was reflected in the first quarter .

When comparing with 2019 there was an increase of 9.51%, that is, 104.3 million boxes were exported versus 95.2 million boxes exported last year (see infographic).

But if you evaluate 2020, in January the sector started very well: 37.6 million boxes were exported , 18% more than what was exported last year.

Then due to the covid-19 effect, exports were reduced : 33.6 million boxes were exported in February and 33 million in March.

Richard Salazar, executive director of the Association of Banana Exporters (Acorbanec), explains that the sector already had a certain ceiling or ceiling that was exported in January (37 million boxes). “That fruit was already contracted, but because of the covid-19, several of the markets reduced our purchases .”

Russia, Poland, England, Germany, France, the Netherlands, Italy, Greece, Belgium, Spain, Eastern Europe (with Ukraine and Georgia), the Middle East, and other countries stopped buying because they were not selling what they normally sold .

The logistics of distribution of the fruit and the closure of borders due to mobility restrictions adopted by governments to slow the growth of the spread of the virus led to a reduction in scheduled purchases.

From January to February the affectation was around $ 60 million, Salazar said , despite the fact that it did grow year on year .
José Antonio Hidalgo, Executive Director of the Association of Banana Exporters of Ecuador (AEBE), indicated that currently banana exports are carried out normally.

He emphasizes that during these sixty days of forced confinement, the union of the sector with its value chain and the adoption of security routes by the Government ” have been important so that the flow of shipments does not stop.”

He acknowledges the work carried out in the public and private ports that have maintained their work rhythm, as well as the cartoneras that have provided the boxes to the sector . “The Government, for its part, supported the documents that are needed to export,” he said.

He also clarified that producers and exporters have made the necessary investments for the protection of their workers. “Not a single day has it stopped cutting, packing and exporting bananas, ” he assured.

In the general context, the sector has had positive results in the year- on- year comparison, but exports were affected by the effect of covid -19.

The price of fruit dropped as supply outstripped demand. The fruit that was no longer exported was donated as food in Ecuador.

Before the covid-19 the sector had been implementing biosecurity measures for fusarium race 4.

The banana growers have invested $ 500 per hectare in biosecurity measures. The world did not stop feeding and the Ecuadorian banana lowered its level but did not stop exporting. ( I )

The sector regained market in the European Union

During the pandemic, the banana sector recovered markets in the European Union (EU): an additional 19% was exported, unlike 2019, which lost 15%.

Markets like the Middle East increased their purchases by 46.86%, Eastern Europe by 37.60%, EFTA by 37.25%, the United Kingdom by 21.78%, the United States by 20.85%, the European Union (27) in 17%, Russia in 16.09%, among others.

Due to the large investments and the growth in the demand for organic bananas in Europe and the United States, the countries of Central America and Colombia, at this time, due to climate factors, have less fruit and Ecuador has higher production.

However , several exporters have been affected in their liquidity due to the fact that importers have fallen behind in payments to exporters in Ecuador.

Certain customers taking advantage of the crisis have tried to lower the prices of the fruit, which has been rejected by banana exporters in Ecuador . ( I )

Logistics had a greater impact on the pandemic

Logistics for banana distribution had a greater impact.

By deciding to quarantine, China prevented the fruit coming from reefer containers from being unloaded at its ports , causing a reduction in the supply of these special equipment.

To this was added the quarantine in the European Union , especially Italy, which caused a delay in the distribution of the fruit due to controls at its national borders, which has caused the supply of containers to be even lower.

Many importers do not customs clear the merchandise and this causes stagnations in ports not only in Ecuador but elsewhere.

At the national level, the activity in the ports of shipment has maintained an acceptable performance . ( I )