The new price of a box of bananas that will determine exports in 2024, exporters and producers will demand this Tuesday, October 24, at the second meeting of the Advisory Council for Bananas, after the first one ended without an agreement, on Tuesday 17. Now the representatives of these sectors hope that new value comes from consensus; However, they come to the technical table with positions and arguments that do not differ much from those they presented at the first technical table.

Exporters insist on their original position that a box of bananas remain at $6.50, which is the current price for 2023, while producers have dropped their claims in relation to the original proposal to raise the price to $8.01 and will at this second meeting come with a suggested price of $7.50. However, there is a difference of $1.51 between the two positions and the intermediate proposal of $7.25 presented by the Regional Corporation of Ecuadorian Banana Growers (Agroban), which is closer to the request of the manufacturing sector.

There was no agreement between producers and exporters to determine the price of bananas for 2024, next Tuesday they will try again

But what would be the consequences for each of the sectors if any of the three proposals were approved?

Richard Salazar, executive director of the Ecuador Banana Marketing and Export Association (Acorbanec), assured that the price increase would push Ecuador out of the market, as he said international destinations are very price sensitive.

“We have to carefully analyze the impact it would have on different world markets, first, because we are not alone, we have competition; second, because the economy of many buyer countries, especially the European Union and the United States, Russia, Argentina, the same deflation in China, means that a possible increase in fruit will have a negative impact on consumption, because at the same time time If fruit becomes more expensive, it is likely that the consumer will stop buying bananas,” explained the host.

On the other hand, if the price remains at $6.50, Salazar assured that Ecuador could take advantage of the competitive advantages it currently has over its competitors. “For example, compliance with the minimum wage… we have a competitive advantage that raising the price to high levels would practically drive us out of the market and miss the opportunity for growth, especially in the European Union,” analyzed Salazar. Nevertheless, the leader Ačorbanec hopes that the price will be agreed and technically agreed between the producer and the exporter.

Regarding exports, Franklin Torres, president of the Federation of Banana Growers of Ecuador (Fenabe), addressed the argument made by exporters about the competitive advantage of paying the minimum wage in Ecuador. He recalled that a few days ago, the banana cluster asked the European community to pay Ecuador a fair price to bring it into line with the living wage. “Isn’t that commercial hypocrisy, to look outside for what they are not able to fulfill here?” asked the head of the producer.

He said the $6.50 price does not cover production costs, “which have gone up tremendously this year.” This, according to Torres, caused a drop in productivity due to a lack of funds to maintain the farms.

“The export sector must think about the fair demand of the production sector to avoid exactly what we are experiencing, this social chaos is precisely generated by the lack of compliance with a fair price for agricultural products, in this case for a box of bananas” said Torres. He assured that the increase they are asking for, which is 2.5 cents more in each box, is not a significant increase and will not affect international consumers either.

Producers: Not taking into account the $25 base wage increase for 2024.

He added that the next increase in the uniform basic wage of $25 adds to the expenses and costs the sector faces, representing more than $1 in the cost of production.

Meanwhile, if the price in 2024 rises to the levels proposed by the production sector, Torres did not rule out that his sector would sign contracts for the export of fruit for that year, after in 2023 most producers focused on selling at price place and not contracts. According to Torres, in 2023 the average price place It amounts to more than 7 dollars per box, so he analyzed that “they (exporters) have the ability to pay”.

He added: “They (exporters) should offer a good price, an adequate price for the producer for the year 2024, precisely so that contracts are signed, and not to have the instability we had during this year,” he said. stated the president of Fenabe.

Banana price for 2024: ‘Temporary cost reduction for exporters is not a net benefit for the sector, but a form of compensation’

Meanwhile, Torres and Salazar admit that if there is no consensus between producers and exporters, this Tuesday the Ministry of Agriculture and Livestock (MAG) will be in charge of setting the new price for 2024. Torres hopes that, if given that option, MAG will analyze the two production costs that were presented, which did not include the salary increase for 2024, he insisted.

For his part, Salazar hopes that MAG will analyze, above all, the technical aspects of the market in order to announce a new price if no consensus is reached. “Be careful if you behave politically as happened in previous years and leave us out of the competition, and the international competition, that is, the whole of Latin America, is taking advantage of this negative situation,” he warned.