The lack of competitiveness and appreciation of the dollar is causing a collapse in Ecuador's banana export quotas.
According to Hubert Garzón, chief operating officer of the exporter Delmonte in El Carmen, exports of this product have been reduced by 40% compared to 2014. This, he said, is due, in part, to lack of competitiveness against the prices of other producing countries, among other factors.
"Other banana producing countries, like Guatemala or Panama, for example, spend less money in shipping the product to consumer markets like the U.S. and Europe, as, for example, they don't pay the passage through the Panama Canal. That allows their product to arrive at lower prices," said Garzón.
Quality
Product quality is another factor behind the reduction of the export quotas, according to Garzón. "Most small producers ignore the recommendations given to improve the quality of bananas, and this also affects exports," he affirmed.
"We need to establish a country brand for our bananas and that heavily depends on us having a quality product, because in the end the most benefited or damaged are not the exporters, but the country," stated the exporter.
Producers
The president of the National Federation of Producers of Bananas for Export, Rafael Torres, partly backs Garzón's opinion. He is aware of the economic reality of the country and agrees with the factors influencing the decline in exports.
However, he noted that this crisis is also caused by the lack of adherence to the reference price by intermediaries, which, he said, sell 95% of the total production of the region.
Precisely this situation caused producers to stop harvesting the fruit. "We did this given the threat from exporters, who wanted to pay $ 5 a box instead of 9. It was an urgent decision by the federation to prevent this abuse," said Torres, who also acknowledged that the situation of the export sector is bad, "but not so much as to justify such prices," he pointed out.
Torres added that although "the reference price stands at $ 7.30, no actual payments are made at this level, since intermediaries say that exporters do not pay them the official price and therefore they offer $ 5. For their part, exporters say they do pay the right price, and so the ball is passed."
Motivation
Failure to pay the reference price is discouraging small producers, who consequently don't invest in improving their crops, explained Israel Pineda, manager of Agrocalidad de AgroCaribe.
"The production cost of a box of bananas is $ 5, and it is sold for 5.50 or $ 6; this prevents small producers from obtaining higher returns and therefore perhaps decide not to invest in their plantations, which harms the production process and product quality," said Pineda.
This assertion is supported by Gilberto Mendoza, who cultivates two hectares of bananas.
Although this is not the case for him, he assures that the vast majority of small producers let their plantations grow in wild conditions; that is, without investing to improve production.
"This way, they only produce four or five boxes, which in no way is conductive to good business," said Mendoza.
Associativity
To cope with the reality of the producers, the Magap is building banana collection centres that are managed by the producers themselves.
One such collection centre, which is already operating, is that of Corpisupal, which is located in Las Palmitas de Agua Sucia, in El Carmen.
More than 30 small banana producers have partnered here to market their produce directly, together with the exporters.
In this way, they are paid the reference price, without intermediaries, as explained by Freddy Mendoza, manager of this collection centre. "These facilities are providing us small producers an opportunity to be able to supply the exporters directly. This way, we have a fair profit margin and can reinvest in our plantations," he concluded.
