The deadline for the registration of the contract related to the export of bananas, which began on January 1 to various international destinations, was met on December 31, 2023, and according to the exporters and producers, 100% of the total fruit was not contracted, as determined by the Banana Law, whose the only mechanism for exiting production is sales contracts.

The situation worries the export sector, which assures that with the beginning of the year the season of high demand for fruit begins and that due to the lack of contracts they cannot satisfy their markets. Richard Salazar, executive director of the Association for the Marketing and Export of Bananas (Acorbanec), assured on January 2 that contracts continue to be entered into – those signed until December 31, 2023 – but predicts that 55% of the total fruit will not be completed.

Considering the slow registration of contracts for bananas, the Ministry of Agriculture reminds that the deadline is fulfilled in 3 days

“We have to meet the external demand, we are starting the high season of demand for our bananas. The export sector is willing to sign the contracts, but unfortunately a large part of the producers do not want to sign,” Salazar complained. The last official figure published by MAG on Thursday, December 21, 2023, the undersecretariat for the strengthening of Musaceae, which showed that up to that date 831 contracts had been signed, representing 38% of the total registered hectares, and that they had received an average of between 60 and 70 requests per week for registration of sales contracts.

Meanwhile, Salazar hopes that the Ministry of Agriculture and Livestock (MAG) will convene exporters and producers to analyze and find a solution to the lack of contract signatures, which is not new in the sector. In 2022, as well as in 2023, producers and exporters also reached a consensus on determining the minimum support price (MSP) for fruit, but last year, according to the export sector, only 40% of the fruit went out through the contract, the rest did so through the price place (at market price and without contract). Last year, after a consensus was reached, exporters and producers pledged that 100% of the fruit would be contracted in 2024.

‘It is necessary to take into account the price place in the banana law’

Likewise, the export sector recognized that in 2023, 55% of the markets where Ecuadorian bananas arrived were price-driven. place, a modality not established by current law, but whose average price ($7.20 in 2023) exceeded the 2022 PMS ($6.50) and exceeded the 2024 PMS in effect and set to $6.85.

Therefore, Salazar insisted that reform of the Banana Law was necessary. “It’s important to include place within the legal framework”, said the head of Akorbanec.

Exporters: 55% of the destination markets for Ecuadorian bananas are ‘spot’, the market eventually imposes itself

For his part, Franklin Torres, president of the Federation of Banana Growers of Ecuador (Fenabe), defends the position of the production sector that there is no need to reform the law, but that the existing one must be respected. The leader is also waiting for the MAG to invite both sides to discuss the situation. “Yes, we hope that MAG invites producers to an open dialogue, but with serious obligations to work and respect Ecuadorian laws, and above all the current Law on Bananas,” said the presenter.