With donations, it aims to evacuate surplus bananas
The oversupply of bananas that has been created in the market, due to the difficulty of being able to sell more than 1 million boxes a week to Russia and Ukraine , yesterday managed to get producers and exporters to sit down and talk at the same table. Leaving aside the differences, this time they have agreed on the need to start evacuating the surplus fruit. The most immediate option is to donate it in the domestic market, in order to prevent prices from continuing to fall and that this continues to affect their flagging income.
The musaceae, as has been said, will be delivered to public and private entities that promote feeding programs ; another part will go as organic fertilizer for the crops of the same farms. However, both parties are still seeking to define a mechanism. For now, the export sector has been the first to accept the request of the producers, that a price be recognized for the clusters that have not been able to be exported.
Richard Salazar, Executive Director of the Banana Marketing and Export Association (Acorbanec), mentions that the proposal is that this payment be made to producers who have a contract. This means, he explains, “that if I have a contract with a producer, instead of telling him to process a box for me, since I won’t be able to export it, he sells it to me in bunches”, he explained.
For this week, Acorbanec alone would have the ability to recruit and donate at least 480,000 boxes of fruit. The idea of this, says Salazar, is to regulate supply and prevent bananas from being exported at low prices, as was already happening. “The problem is that some foreign clients were taking advantage of the situation in Ecuador, to buy at a lower value: between $2 or $3 per box in the non-contract markets, in the spot market. With this we are sending a message to importers, telling them that no more fruit will come out at low prices, that it is preferable that it stays and is given away.”
However, until yesterday afternoon, the main directors of the National Federation of Banana Producers (Fenabe) continued to analyze the viability of this proposal. Segundo Solano, union spokesman, said that one of the issues to be determined is the value they would receive for each cluster. The leader admits that the situation in the market has become so complicated, to the point that there are producers who, in recent weeks, have been forced to accept up to $1.20 for each box. And that, when there is a law that establishes a support price of $6.25, it cannot continue to happen, he points out.
For this reason, he maintains, his union would be willing to accept up to $2 per bunch, but the idea, he clarifies, is that exporters, if they buy the boxes, “respect the official price.”
Salazar acknowledges that this value has not been defined, but he believes that it should be set by mutual agreement between the parties , “depending on the characteristics of the producer, if he has a contract, a quota, the percentage.” That is still a pending issue.
The alternative is seen weeks after the government’s refusal to intervene to find a solution to the problem. What has been said is that since this is a private business, in which you invest at your own risk, it was impossible to nationalize the losses that the war has generated, also in other sectors such as flower or shrimp farming. According to data from the Association of Banana Exporters (Aebe), the country has accumulated losses of $18.3 million, since that is the value that it has stopped selling bananas to Russia and Ukraine. A reduction of 42.5%, when compared to 2021.
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THE ORIGIN. The war between Russia and Ukraine, which began on February 24, has been generating a direct and indirect impact on global foreign trade. Ecuador, which sends 25% of its bananas to those markets, is also suffering the effects.
THE EFFECT. The problem has not only caused some shipping companies to stop taking the fruit to these destinations, but it has also devalued the Russian currency, thus reducing the economic capacity and interest of importers in purchasing the product, which is now more expensive for them.
THE CONTROL. Prices are down, a factor that exporters attribute to the oversupply of fruit. The Ministry of Agriculture announced yesterday a control to ensure that the product, which is not linked to the conflict, is sold at the official price.
https://www.expreso.ec/actualidad/economia/donaciones-apunta-evacuar-excedentes-banano-124157.html