Posted on

Ecuador’s banana sector calls for higher prices to reflect new scenario

Calls for supply regulation to protect banana prices 

As annual contracts with retailers are renegotiated, Ecuador’s banana industry (represented by ACORBANEC, AEBE, AGR) has released a statement regarding prices. ReeferTrends reports that German retailer Aldi has announced it will increase its buying price for Ecuadorian bananas in 2020. While the Ecuadorian banana industry welcomes the move, it feels that this rise does not fully reflect the current situation. In 2020, there will be the introduction of a Bunker tax on shipping fuel that will increase costs for suppliers, while there is also the need to take measures to prevent the spread of the Foc R4Tdisease. The press release also highlighted the incongruence of German apples costing up to three times more in German discounters than Ecuadorian bananas shipped from another continent.

Posted on

China’s banana imports soar

Chinese banana prices begin to stabilise

Banana imports reached a new record volume in May 2019, with a volume of 227,200 in one month alone. This soaring demand for bananas in China is attributable not only to a growing middle class but also to the popularity of “Western” products like smoothies. In 2018, China overtook Japan as the main overseas market for Philippine bananas, and now receives over two-thirds of the Pacific island’s banana exports. Banana cargoes are also on the rise from Mexico and Cambodia.

The most imported fruit to China in value terms in 2018 were cherries ($1.3 billion), an increase of 69.4% from the previous year. Next came durians ($1.1 billion, + 9.4%), bananas ($0.9 billion, +54.8%), and grapes ($0.6 billion, down 0.3%). In volume terms, bananas lead the way (1.5 million tons, +48.7%), followed by durians (0.4 million tons, +92.5%), and oranges (0.4 million tons, +9%).

Posted on

Ecuador’s banana exporters look beyond EU

Calls for supply regulation to protect banana prices 

Despite problems with the EU market and adverse winter conditions, Ecuador recorded a 2% year-on-year increase in banana exports during the first quarter of 2019, shipping 95.3 million boxes. However, Ecuador’s banana exports to the EU dropped 15% in the first three months of the year, according to the Banana Marketing and Export Association (ACORBANEC). The fall in shipments is attributed to cheaper competitors like Guatemala. Administrator of ACORBANEC, Richard Salazar, said, “Ecuador’s current law guaranteeing a minimum price for producers makes its bananas much more expensive than its competitors. Guatemala is selling cheaper bananas at about 50 cents less than Ecuador and that has made some customers from abroad, especially Germany, prefer to buy more from other Central American countries. Ecuador has not lowered its prices – it sells them at the same price. But the reaction was to buy more from the competition because we are much more expensive.”

The EU accounts for 29% of Ecuador’s banana exports, followed by Russia (23%), the Middle East (12%), the US (11%), Asia (7%), and South America (6%). China and Japan have increased purchases of Ecuadorian bananas this year, shifting away from the Philippines where production problems were encountered. Similarly, the Middle Eastern markets increased imports by 11%, according to ACORBANEC.

 

Posted on

Latin American banana exports worth $5.6 billion

Latin American banana exports worth $5.6 billion

Latin America and the Caribbean is the world’s largest banana-exporting region. Estimates point to a total combined export value of around US$11 billion for bananas and major tropical fruits from Latin America and the Caribbean, of which bananas accounted for about US$6 billion, according to data published by FAO. Between 2016 and 2018, the total production volume of bananas in the region was an estimated 30 million tons per year, while total exports reached an annual average of 13 million tons, representing 80% of world banana shipments, worth US$5.6 billion per year.

Source: FAO

 

Posted on

Germany looks to alternatives to expensive Ecuadorian bananas

Calls for supply regulation to protect banana prices 

Due to the high price of Ecuador’s bananas, exports to Germany have dropped by 20-25% in 2019, according to industry sources. German retailers are instead looking to buy cheaper alternatives from Central America, like Guatemala. The relatively high prices of Ecuadorian bananas are due partly to the country’s government setting a minimum sales price and partly due to the higher shipping costs from South America, from where ships must pay to cross the Panama Canal. On October 26, 2018, the Ministry of Agriculture of Ecuador set the minimum price for 2019 at US$6.30 per 20 kg box of bananas.

Europe and the US account for around 45% of Ecuador’s banana exports. The bananas no longer purchased by Germany are heading to Russia and other markets in Europe and the US. Ecuador’s banana production has increased on average by 17% over the past two years.

Posted on

Colombian banana exports rise 2.5% despite weather issues

Colombian banana exports rise 2.5% despite weather issues

In spite of challenges with the weather conditions, Colombia’s banana exports rose 2.5% in 2018, reaching just over 100 million boxes worth around US$859 million, according to the Augura association, whose members represent 78% of the total volume. Bananas represent Colombia’s third-largest agricultural export after coffee and flowers.

Due to the El Niño effect, the crop didn’t reach its full potential in all production areas throughout the year. The Augura Association is now working on developing a country-wide label to grow in markets and open new destinations. The first few months of this year are expected to be dry in Colombia, meaning production will not be at its maximum.

Posted on

Fusarium wilt disease triggers race to find resistant banana variety

banana fusarium

The race is on to develop a banana variety resistant to the diseases and climatic changes that currently threaten the world’s favourite fruit. International trade in the fruit is worth US$13bn a year. But the global supply chain is threatened by a virulent disease that has been attacking plantations in Australia, south-east Asia and parts of Africa and the Middle East. Experts warn that “Fusarium wilt”, or Panama disease, could spread to Latin America, from where the majority of bananas are exported, prompting scientists to research new varieties. The Cavendish variety currently accounts for 99.9% of bananas traded globally, having itself replaced a tastier variety wiped out by disease in the 1950s. Now researchers at Tropic Biosciences in the UK are using gene-editing techniques to develop a more resilient version of the Cavendish. The company’s CEO, Gilad Gershno, said, “If you look at the broader consumption on top of exports, the banana industry is worth a massive $30bn a year. However, people have been getting increasingly worried because the plant is heavily cloned so if you have a disease that can kill one tree, it can potentially wipe out the entire industry.”

Tropic Biosciences has already conducted successful gene editing on a banana cell which can be grown into a full plant. The preliminary results have been encouraging and field trials should begin in Central America, the Philippines and Turkey over the coming year.

As the disease is spread by aphids, the only treatment is to uproot and burn all the plants, which is very costly. Last year, researchers from Queensland University of Technology in Brisbane, Australia, designed a genetically modified Cavendish banana with resistance to the soil-borne Panama disease.

Posted on

Is EU banana sector in crisis?

banana

The trade agreements signed between the EU and Latin American countries providing tariff preferences includes safeguard clauses and a stabilisation mechanism for European producers. Despite the EU commission stating that the increase in imports of Latin American bananas would have no negative impact on the price levels and stability of the European market, in contrast with most years, when banana prices begin to fall in May, this year prices plummeted in April, from €19 per 18.5kg box in Poland to €3. This would appear to mark the commencement of a structural crisis of overproduction in the banana sector.

The exponential growth seen in Latin American banana production, coupled with the fact that export thresholds granted by the EU are regularly exceeded, the EU commission is being urged by European producers to take steps to protect the region’s banana production. One proposal is to temporarily suspend preferential tariffs.

Posted on

Global banana market in crisis

banano mundiall

After 2018 got off to such a positive start in terms of both price and volume, the banana market has experienced a rapid fall in prices since April due to overproduction. This crisis, which started in Russia before moving westwards, comes at a time when negotiations are set to begin between Europe and the countries of the dollar zone with a view to lowering tariffs. This crisis has been on the horizon for some time now and has only been averted thus far by adverse weather conditions lowering output. But the long-expected trouble now appears to be at the gate. The exceptional beginning to 2018 has made the subsequent fall that much more dramatic. Prices have fallen from a record high of €18-19 to a record low of €3-4.

The oversupply derives from the huge international production base which has grown to meet the rising consumer demand. Meanwhile, productivity is also rising and other producing countries are re-emerging such as Honduras and Nicaragua. West Africa is also expanding (with the noteable exception of Cameroon.)  

Posted on

Ecuador’s banana exports drop 13%

Ecuador exportaciones semanales

Prices of Ecuador’s bananas have fallen as poor market conditions have led to lower exports (13% below average). The situation in Russia is particularly bad, with extremely low prices. The Spanish market price is more positive due to the supply deficit in the Canary Islands. In Weeks 1-21 of 2018, the average market price on Ecuador’s domestic market was up 1% compared to the same period of the previous year.

Meanwhile, Australian banana producers are looking at the possibility of exporting to the Philippines with import protocols in the pipeline. However, industry experts are doubtful about the current state of the Australian domestic banana market, with low demand causing an oversupply and a lowering of profits. Production costs are considered to be rather high in Australia, thereby impeding the country’s producers’ efforts to compete on the international scene.