Ecuador already has a 2024 minimum support for its bananas after producers and exporters agreed to set it at $6.85 on Monday afternoon, November 6. It took four meetings of the Banana Advisory Council to reach an agreed price, the last of which was held hours before Agriculture and Livestock Minister Eduardo Izaguirre unilaterally set the price after three attempts ended in disagreements.

However, despite the announced consensus, the manufacturing sector was not satisfied with the new price. Franklin Torres, president of the Federation of Banana Growers of Ecuador (Fenabe), who was at the technical tables and during the announcement of Minister Izaguirre, admitted that at this last meeting his sector, which a week ago did not accept the price of $6.85 that they set exporters, had to consider new conditions that they did not have in the previous tables, on October 17, 24 and 30. The most important thing was that for this fourth meeting it was already known that the Minister of Agriculture and Livestock in Daniel Noboa’s government would be Danilo Palacios, which influenced the decision and led the sector to reject its initial proposal to raise the price of the box. .. banana at $8.01, or at least $7.50, in search of a consensus with exporters.

The minimum price for a box of bananas for 2024 was set at $6.85 after a last-minute consensus between producers and exporters

“The consensus was today (Monday, November 6), we didn’t before, obviously the circumstances of the next government were also seen, the minister will be an exporter of bananas and obviously we didn’t have those thoughts before, with all these circumstances we had “We had to see what is the best for everyone… The conditions varied, knowing that the minister is an exporter of bananas, obviously we had to have certain considerations, certain precautions about what could happen in the future if he sets a different price,” Torres justified. .

The leader believes that this condition, that the next minister should be related to the banana business, should be beneficial for the sector and the country as long as the banana business does not start and end only in export for the future minister. Somehow he – the future minister Danilo Palacios – must understand that the production sector, its workers, associates and associates are fundamental for the realization of this export and in a way, if there were no such thing, there would be no export at all”, analyzes the head of Fenaba.

On the other hand, Minister Izaguirre revealed that the transition process with the new Minister Palacios has already begun.

Productivity will be key for the new price to cover production costs

Technically speaking, whether the new price covers the costs of the manufacturing sector is another question and depends on another variable: production. Torres explained that the $6.85 per box will cover costs if acceptable productivity is achieved and as long as the El Niño phenomenon does not affect the sector.

But the head of Fenabe announced that certain effects are already being felt, revealing that they currently have 4,000 millimeters of rain while the normal amount is 1,600 or 1,800 millimeters. “In the El Niño phenomenon of 1997-1998, it was 4,600 millimeters, if it continues to rain in November and December, we will equal that El Niño phenomenon,” Torres said.

This newspaper consulted Segundo Solano, president of the El Oro Banana Producers Association (ABO), about the consensus reached, however, the leader, who is also the vice president of Fenabe, indicated that he would wait for the ministry to issue ministerial approval with the new price and publish it in the official registry for pronouncement, but not before a meeting with producers from their province.

The last attempt to determine the price of a box of bananas between producers and exporters for 2024 failed and the definition was left in the hands of the Ministry of Agriculture

Meanwhile, the export sector is also waiting for the official announcement of the new price, although they have already started negotiating with their international clients for 2024, according to Richard Salazar, executive director of the Banana Marketing and Export Association (Acorbanec).

The leader hopes to start signing contracts with producers as soon as possible and clarified that the start for this was in 2023. This year, the fights between exporters and producers over signing contracts were focused on the latter’s preference to sell fruit in place (without contract and at market price), a situation they hope will change by 2024 by harmonizing the Banana Law, which only stipulates that fruit must be shipped with signed contracts.

55% of the markets where Ecuadorian bananas arrive are ‘on the spot’

Despite this, Salazar admits that 55% of the destinations where Ecuadorian bananas arrive are managed markets place and reminded that this is the reason why his sector insisted on reforming the Banana Law in order to make the market fair. place. “Many producers prefer to sell according to this scheme, which does not exist in the law, but is done informally… I understand the freedom of the producer sector to decide whether it wants a contract or placebut at the moment the law does not think about it… for now, the regulations mandate the signing of contracts and we have all the possibilities for that, we hope that the production sector will also want to conclude contracts,” said the head of Acorbanec.

The main benefit that producers see when selling in place These are the high prices that fruit reaches. According to the Regional Corporation of Ecuadorian Banana Growers (Agroban), the price place In the 43rd week, it was at $7.08, which is even higher than the new minimum price set for 2024.

Controversies surrounding the price of bananas are understandable due to the situation in which producers and exporters find themselves, former ministers and experts justify

In this regard, the president of Fenabe, Franklin Torres, stated that his sector will sign the contracts, but it will depend on respecting the new set price and reminded that in previous years there was non-compliance, which caused producers to sell at place and will not sign contracts. “The complaint comes because the law is not respected… what was not here in the case of banana activities is a sanction, which is exactly what we want,” Torres pointed out.

About the price place, The leader assured that he will always be taller, at least in the coming years. He explained that this is primarily due to the internal shortage of bananas in Ecuador. “The damage has already been done here in productivity, it’s damage that can’t be fixed overnight, it’s damage that will take at least two or three years to recover from and will somehow drive up the price place “always be high,” he analyzed.