The new minimum support price (MSP) for a box of bananas for 2024, which was agreed between producers and exporters on November 6 at $6.85, is now official following the issuance of Ministerial Agreement 089 on November 13 by the Ministry of Agriculture and Livestock ( MAG). However, the same price remains wait contract negotiations for next year with the main fruit market, Europe.

According to the latest export report of the Association for the Marketing and Export of Bananas of Ecuador (Acorbanec), of the 300.89 million boxes exported from January to October 2023, 29.12% were destined for the European Union (EU). ) its main market; which was also one of the destinations that recorded the highest growth in that period with 20.44% higher exports.

Banana prices: How much leaves Ecuador and how much comes in and is sold on international shelves?

But the new price of $6.85, which is equivalent to $0.1593 per pound, does not convince the supermarkets of the Old Continent, they assure the export sector. Richard Salazar, CEO of Acorbanec, revealed that European buyers were willing to negotiate with the previous price, which was $6.50. “In Europe, contracts have not been signed yet because they are reluctant to accept the new price,” said the leader.

This situation was already noticed by the export sector during the negotiations on the new price, which extended to three advisory councils, two of which ended without consensus. At the meetings, the exporters proposed keeping the price of a box of bananas at $6.50 precisely anticipating the high sensitivity of international markets, especially the European one, to possible price increases. Meanwhile, the manufacturing sector asked for the price to rise to $8.01 or at least $7.50, but they eventually agreed with exporters that the value would be $6.85.

Producers are also waiting for exporters

Meanwhile, Salazar indicated that they are waiting to see what happens in Europe and for clients to accept the new price, as he assured that “we cannot accept less than that”, but at the same time, the boss of Acorbanec revealed that internally they are also expecting the production sector to agree to the signing of the contract. “They want to sign 50% of the contract and 50% place”, Salazar revealed.

This position of the production sector is not new, since in 2022 most of the fruit came through the price place (without contract and at market prices), in view of the refusal to sign the contract, but also from the export sector, it was pointed out that 55% of the markets where Ecuadorian bananas arrive are managed below the price place, a modality that is not prescribed by the current Banana Law, which is why exporters insist that the regulations be amended to include this method of negotiation.

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

Meanwhile, José Antonio Hidalgo, executive director of the Association of Ecuadorian Banana Exporters (AEBE), indicated that the new head of MAG, Danilo Palacios, must detail the percentage of contracts signed to date until 2024. that everything be signed as prescribed by law. Everything must be contracted and we hope that the government will do it precisely by the end of the year, precisely so that we can guarantee the formality for the year 2024″, said Hidalgo.

However, Salazar hopes that part of the contract for next year will be concluded by December.

How are exports going in 2023?

According to Acorbanec’s latest report, cumulative banana exports from January to October 2023 were 300.89 million boxes, up 7.09% from exports in the same period in 2022.

After the European Union, Russia was the second largest destination after receiving 21.09% of exported Ecuadorian fruit; 14.99% went to the Middle East as the third largest destination; 9.15% to the United States, which was ranked as the fourth best destination; 6.84% towards the southern cone; 6.15% was exported to East Asia; to Africa 5.44%; 2.99% to Central Asia; 1.48% to Eastern Europe; 1.37% to the United Kingdom; 0.94% in Oceania (New Zealand); 0.41% according to EFTA (Norway); 0.003% in Canada; and 0.03% to other markets.