Old policies make Ecuador bananas lose competitiveness
The Banana Marketing and Export Association (Acorbanec) stated that the Government needed to allow the planting of new hectares, since from the beginning of this ban Guatemala planted 50,000 hectares, Panama increased its area to 45,000 hectares, and Colombia aspires to plant another 5,000 hectares.
After 21 years, the Banana Law is returning to the legislative arena. However, according to the declarations of the banana assembly members, the reforms maintain what exporters consider obsolete: the ban on new plantings and a single official price.
Regarding prices, Richard Salazar, the head of Acorbanec, said there was a spot market that obeyed the new world reality, with countries where a different price per box was paid, according to the need of the moment. The spot or off-contract price, which is now illegal, reached $17 this year. And no one protested.
He also said that the assembly members seek to avoid new plantings so that there is more speculation. "Today, one hectare costs between 40,000 and 50,000 dollars, which scares away interested investors from France and Japan from investing." In addition, what would happen if the Race 4 of the Panama disease arrives to the county and the crops have to be replaced in other areas? Where will the fruit be sown if there is a ban?
Patricio Mendoza, a producer from the province of Los Rios and president of the subcommittee of the Food Sovereignty Board, said there was a key point in the expansion of the banana areas because it could over saturate the international export market.
Carlos Falquez, a banana producer that is a representative of the province of El Oro and former mayor of Machala, said that the banana crop exceeds 180,000 hectares, which could lead to an oversupply of this product. "The Ministry of Agriculture must conduct a census of the sector to know the projections of production and demand." Ten years ago there were 129,000 hectares.
The Food Sovereignty Board analyzed the report prepared by the subcommittee on the draft Law Amending the Law that Regulates the Production and Marketing of Bananas, Plantains, and other Musa for export.
During the meeting, the members of the Commission headed by Ricardo Zambrano presented comments regarding technical and production issues and requested that the reform project be reformulated before it is presented to the Plenary of the National Assembly. Acorbanec wants that at least 30% of the exported boxes be sold under the spot modality (without contracts), because it adjusts to the reality of the market.
Many producers (including the largest ones), do not comply with their contracts when the spot price is above the official price and sell their products to whoever pays them the most. Banana legislators want to keep the official price, which is constantly violated.
To support companies and producers with responsible practices. FGH International Agribusiness Consulting, offer agricultural consulting and business service solutions that merge sound agronomic principles with economic business objectives. Our value proposition not only lies in agricultural consulting, but also in business service solutions for the Latin America area. We focus on maximizing our partners rate of return consistent with cost-effective and sustainable agronomic practices. we work in partnership with first class Agribusiness solution providers, developed by and for sector commodities stakeholders such as banana, sugar cane, palm oil, flowers, coffee, cocoa, beef, etc. despite language, country, region, we provide solutions that enables producers and processors not only to keep track of performance, but also to set realistic goals and to elaborate improvement plans for each stage of the journey to more sustainable production, helping to go beyond certification/verification levels. creating greater visibility of the progress made over time by (non-)certified/verified producers, allowing to roadmap every stage of the Agribusiness value chain.
To find out more about our solutions or to share learnings to support suppliers on their journey to excellence, please feel free to contact us, FGH´s International Agribusiness, Latin America's leading Agribusiness Consulting firm