After closing 2022 with total exports reaching $32,658.3 million, an increase of 22.3% compared to 2021, several manufacturing sectors warn of another reality far from the obvious positive figures. This scenario, which is unfavorable for these sectors, is associated with a loss of competitiveness and a lack of export promotion.

The shrimp, banana, cocoa and banana sectors, represented by the Corporation of Exporting Guilds of Ecuador (Cordex), reveal this unfavorable panorama for them, to which is added the impact of crime due to container contamination and attacks.

The export sector is asking the Government to review the tax burden, which affects its costs and competitiveness

The union comprises more than 70% of Ecuador’s export offering, which brings together more than 700 companies, creates close to 900 thousand direct and indirect jobs and represents more than 13,000 million dollars in foreign currency last year.

In a press release on Tuesday, February 28, Cordex pointed out that it has publicly and on more than 4 occasions requested that the Government, through its state departments, direct efforts to reduce the tax burden, generate incentives for exporters, optimize services and assume the fight against organized crime, which affects the entire production chain, but without positive results.

In addition, according to the union, the main competitors of Ecuadorian products enjoy incentives and subsidies that allow them to gain market share. In addition, the factor of a strong currency such as the appreciating dollar discourages the purchase of Ecuadorian products in some destinations, with the slowdown noted by the conflict in Russia and Ukraine and the high increase in raw materials.

Faced with these claims, the union asked the Government to draw up a competitiveness plan that enables the development of the manufacturing, industrial and export sectors of the sector, considering two main factors: the revision of costs that affect competitiveness and internal security and cargo security. In addition, the creation of a sectoral national and international promotion plan to promote the consumption of Ecuadorian products.

Meanwhile, each sector presented its different problems.

In the case of bananas, José Antonio Hidalgo, vice president of the Cordex Board of Directors and executive director of the Association of Ecuadorian Banana Exporters (Aebe), insisted that one of the main negative factors for his sector is container contamination, since the Banana sector represents about 66% of logistics in the whole country, and being the most exposed, they had to invest heavily in private insurance. About $200, which totals more than $72.8 million.

The health of the production chain is going through bad times, despite record exports and an alleged balance sheet surplus

He indicated that he has prepared a matrix of 23 points that deal with various issues of 14 regulatory institutions at the national level, around: reducing tax pressure, which according to Hidalgo they do not have, and tax burden. “And as far as the reduction of paperwork is concerned, and in some cases these are turnkey projects that we submitted to the competent ministries and so far we have had no results according to these proposed regulations; and three, security,” Hidalgo complained.

For his part, José Antonio Camposano, President of the Board of Directors of Cordex and Executive President of the CNA National Chamber of Aquaculture, reiterated that, as in 2022, the production of Ecuadorian shrimp is now 24% more expensive compared to 2021. One of the main factors that influenced to increase production costs, they are focused on the abolition of the differential price of diesel, which at the end of last year increased the price of the item by 16 cents per pound, which affected 82% of the shrimp area.

“The first figures for January show an increase in volume, but zero growth in collection. There are no concrete actions that positively affect competitiveness, which becomes crucial when the economy is dollarized, because we cannot transfer costs to the final price, on the contrary, we become more expensive when the currency strengthens in relation to the country’s currency. destination markets. Under this scenario, competing in the markets becomes a very complicated task,” Camposano complained.

The cocoa sector, for its part, has been affected by the effects of climate change affecting production, with the presence of pests and diseases, according to Merlyn Casanova, executive director of the National Association of Cocoa Exporters and Industrialists of Ecuador (Anecacao).

He added that his main competitors: Ivory Coast and Ghana (which represent 60% of world production) have the constant support of their governments for the development of their sectors and in creating common policies and actions that benefit producers.

“Neighboring countries have benefits such as refunds or other incentives for productive sectors, we do not have any kind of incentives. In addition, they have a marketing plan for their main products and invest in them as part of public policy. Since cocoa is a product of history and tradition, it does not have any representative international campaign,” Casanova pointed out.

Meanwhile, Eduardo Manrique, executive director of the Banana Exporters Association (Asoexpla), indicated that his sector has been affected by the increase in fertilizer prices, as well as other inputs such as cardboard and plastic.

Gold exports are growing more than oil and shrimp

He added that it is not in their favor that they are within the law that establishes the minimum support price because it reduces their competitiveness compared to the competition they do not have.

“We have the price of low productivity, which means that there is less fruit and because it is a scarce product, its price rises.” Manrique pointed out.

Faced with these claims, Cordex asks the Government to create a competitiveness plan that enables the development of the manufacturing, industrial and export sectors of the sector, considering two main factors: a review of costs that affect competitiveness and internal security, as well as cargo security. In addition, the creation of a sectoral national and international promotion plan to promote the consumption of Ecuadorian products.