Ecuadorian exporters assure that their clients abroad do not recognize the burden of costs for freight and supplies such as cardboard and plastic
After a week of struggles between producers, exporters and the Ministry of Agriculture and Livestock (MAG), the latter made official this Friday 29, through Ministerial Agreement 057 signed by Minister Pedro Álava, the price of a box of bananas for export in 2022 at $ 6.25, the same price that is in force for this year .
In this way, the export sector crossed out from its pending list the setting of the minimum support price (PMS) that it needed to start negotiating the fruit with importers in international markets. However, they are far from reaching the desired rate, due to the increased cost of freight and other inputs in the chain, such as cardboard and plastic; in addition to other variables that keep negotiations delayed.
Ministry of Agriculture sets price of banana box at $ 6.25
This was revealed Richard Salazar, executive director of the Banana Marketing and Export Association (Acorbanec), who pointed out that the sector began to talk with importers in Europe, Russia, the Middle East and other destinations, since the beginning of October.
He explained that the problem is concentrated in the fact that although the price has been set, it is only a reference minimum and international buyers, especially supermarkets that -according to Salazar- currently have market power, continue to maintain their position. to pay less for fruit and are reluctant to acknowledge the rising costs of cardboard, plastics and supplies.
“That is worrying, because the FOB cost has risen, imagine that the cardboard is worth more than $ 1.19 per box and other items; and we have said it publicly through a letter … concerned that the imposition of buyers remains the same and the position of us exporters is not to sell at less than that price, “said Salazar, who assured that for this reason the export sector is promoting a campaign in the EU, the United States and other destinations so that the right price for the fruit is paid.
He added that the logical thing is that the increase in costs is passed on to final consumers, as they have done with other fruits and products. However, Salazar believes that his clients do not want to do so to maintain this position of low prices for bananas.
Nevertheless, José Antonio Hidalgo, Executive Director of the Association of Banana Exporters of Ecuador (AEBE), believes that Ecuador must be very attentive to international markets these days, since the inflation risks in those destinations will make retailers cannot continue with their policy of not increasing prices to consumers.
“Yesterday (Friday), Fresh Del Monte announced that the prices of bananas and pineapples that it sells to retailers abroad they will increase because it cannot continue absorbing the increase in costs ”, revealed Hidalgo, who insisted that Ecuador must worry that there is a quality production and packaging material to export the fruit and not stay in the country for the lack of these.
Hidalgo analyzed that the problem of transport logistics and other variables does not depend on exporters or importers, although he assured that the contracts are being negotiated with caution.
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“There is 90% of the fruit that is shipped in the FOB mode. We are interested in all markets, but they have priority: European Union, Russia, Middle East, United States of America, Asia, South America, which total around 80% of the weekly supply that ships, ”said Hidalgo, who assured that we must work in internal competitiveness by lowering the tax burden that the sector has, and working on trade agreements with Euroasia, where Ecuador has growth potential but a heavy tariff burden.
Added to this is the sector’s concern due to the fact that Ecuador’s competing countries are already signing agreements. For example, the Philippines that has just announced the signing of the treaty with South Korea, where in five years they will go from a 30% tariff to a zero.
In turn, other markets such as Eastern Europe, Africa, the former Soviet republics are important given the stagnation of world demand and depressed prices, explained the executive director of AEBE.
Exporters have until the end of December to sign contracts with their international clients, of which the main one is the European Union (EU), where has the 27,36 % of the 281.95 million boxes, which have been exported from January to September 2021. In total, exports show a decline of 3.17% compared to what was exported in the same period of 2020.
The second destination is Russia with 19.44%, followed by the Middle East with 14.17%, 10.17% towards the United States; 6.93% towards Eastern Europe; 6.86% to Africa; 6.76% towards the Southern Cone; 5.60% was exported to East Asia; 1.32% was exported to the United Kingdom; 0.89% to Oceania (New Zealand); 0.48% to EFTA (Norway); and 0.03% to Canada. (I)
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