Six reasons why the Ecuadorian banana sector is growing
Posted On 28 Jan 2021
Between 2016 and 2020, Ecuador has achieved growth of more than 61.4 million exported boxes, 19% more.
The factors that have contributed to this performance are in particular the new plantings of the fruit, which brought about 8,000 hectares into production last year, and the increased demand for Ecuadorian fruit in the European Union, Eastern Europe and the Middle East . However, there are other aspects of the industry to consider, the large number of exporting companies, the legalization of new plantings, the infrastructure and the price above the official one.
- During the last years, the real average prices were above those decreed by the central government, which has motivated not only new plantings, but also the renewal or maintenance of existing and registered hectares. Although during 2020 the spot prices (out of contract) were below four dollars, towards the final months the box of the fruit was quoted above 7 dollars.
- The increase in production due to the new plantations of bananas is evident, especially in the province of Los Ríos, where producers have greater economic capacity. This growth, which is added to the renovations of the plantations, has a direct influence on exports, which in the year that just ended allowed the sale of 380.4 million boxes to the world, compared to the 357 million in 2019, according to the statistics of the Banana Marketing and Export Association (Acorbanec) . This represents an additional 6.45%.
- The producers have many national and multinational exporting companies that buy from them. There are 100 companies that buy 91.6% of the boxes that are placed in international markets. The first five companies, Dole (Ubesa), Reybanlac, Frutadeli, Comersur and Agzulasa, barely ship 29.81% of the total, according to Acorbanec.
- The actors in the chain (producers, exporters, suppliers, government, financial institutions) adapt to the changes demanded by markets and consumers. And that was what happened, for example, during the critical months of the pandemic.
- The rise in demand, especially in the European Union (9% more), Algeria, the Middle East (21%) and Eastern Europe (12%), was a strong point, since Ecuador is a traditional supplier of these markets . In addition, the country has fruit throughout the year, and a tax reform for the export sector that helped avoid exporting taxes.
- The dredging of the access channel to the ports made larger ships arrive, the sustainability of the sector reported in the UC Davi s report, the reform that allows new plantings to be legalized, organic production also influenced.