Calls for supply regulation to protect banana prices
Ecuador’s banana growing area has been heavily hit by the Coronavirus pandemic. Although banana production and exports have remained operational throughout the crisis, demand has dropped by up to 25% due to the disruption of global markets. Richard Salazar of exporter association Acorbanec said,
“In the first two weeks following the declaration of a state of emergency, practically everything that was programmed to be exported was shipped, in spite of significant problems with the availability of containers and other production materials, heightened controls and absenteeism of transport workers and other members of the supply chain due to fears of contagion. But markets like Russia, Europe and the Middle East have reduced or stopped banana purchases, mainly due to logistical and distribution difficulties resulting from measures taken by countries to slow the spread of the virus.”
There has been a dramatic slump in prices, which as of mid-April were hovering between US$2 and US$2.5 per box, compared to US$12-15 at the start of the year. To avoid further price falls, Acorbanec is calling for supplies to be regulated immediately until the worst of the crisis is over.
“Some importers have fallen behind on payments and others have not been able to pay at all, affecting the liquidity of export companies. And certain clients are unfortunately taking advantage of the crisis to try and lower prices further, which we are resisting,” said Salazar, who added, “Bananas are hugely important for Ecuador’s economy, generating 250,000 direct and indirect jobs and around US$3.1bn in foreign currency. If exports are affected, the economy will pay a high price.”