“Erratic and volatile”few months for Ecuadorian banana exports
The Ecuadorian banana industry has experienced a volatile few months, with a period of explosive demand at the beginning of the year suddenly followed by a market crash.
Hugo Castro, general manager of Ecuador-based exporter Gina Fruit, told Fresh Fruit Portal it has been a complicated year so far for many banana-producing countries.
“The situation with Ecuadorian bananas this year has been quite erratic and volatile, mainly due to external factors,” he said.
Cold and wet weather at the start of the year caused a significant drop in production from Central American countries including Costa Rica and Panama, as well as Colombia. Castro explained that importers had therefore looked to Ecuador to fill the gap.
“There is wasn’t much fruit anywhere,” he said.
“Exporters had finalized their agreements – especially the multinationals – and to cover this gap in production the companies came to Ecuador to look for fruit.
“This sent the prices soaring to levels that we have never seen. It was completely unexpected, with prices around US$18 for a box of fruit.”
Castro said the subsequent recovery in Latin American production led to adverse market effects.
“There were rising levels of production and low demand from the multinationals and big importers, which…collapsed the market due to the oversupply,” he said.
“At the beginning of April there was an unexpected collapse of the Russian and Polish markets, which are big consumers of Ecuadorian bananas in Europe, and at the same time the U.S. began to come under pressure.
“So the market reached price levels that were not normal for that time of year, around US$2 per box.”
Castro explained the period that typically sees the highest prices for Ecuadorian bananas runs from December to mid-May, making the low price points seen this year very unusual.
To complicate matters further, between mid-Mach to the end of May Ecuadorian exporters had to pay an additional cost to shipping companies to transport their fruit, Castro said. There was also a shortage of container space for Ecuadorian bananas due to high demand for shipping services in other countries, he said.
According to Castro, since around week 22 markets have been improving, in part thanks to a higher level of domestic consumption, with export prices recovering thanks to lower available supply.
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