According to statistics published by the Banana Marketing and Export Association (Acorbanec), Ecuador's banana exports from January to May 2022 stood at 158.15 million boxes. This figure represents a 6.36% drop in shipments compared to the same period in 2021; equivalent to 10.74 million boxes less.
26.96% of shipments went to the EU-27 (where the reduction in exports amounted to 12.11%); 21.40%, to Russia (-2.09%, while as of February it had grown by 13.98%); 17.21%, to the Middle East (+35.10%); 8.74%, to the United States (-25.35%); 6.69%, to the Southern Cone (+3.96%); 5.81% was exported to East Asia (+6.04%); 4.94% to Africa (-34.79%); 3.24% was exported to Eastern Europe (-41.92%); 2.66% to Central Asia (+37.86%); 1.07% was exported to the United Kingdom (-19.12%); 0.77% to Oceania (-10.54%); 0.46% to EFTA (-0.61%); 0.02% to Canada (-51.74%), and 0.04% to other markets.
According to the entity, the reduction in exports is a result of various factors of a productive, economic or logistic nature.
As regards the production, Acorbanec reported a lower harvest as a result of the fact that producers stopped fertilizing due to the higher price of fertilizers, which was in turn due to the increases in the price of oil and maritime freight, in addition to the fact that the storm season in the United States led to the temporary closure of the largest nitrogen complex in the world, owned by CF Industries Holding. The elimination of active ingredients such as chlorpyrifos by the EU, as well as climatic factors, also took a toll.
"The volumes to be harvested in the following 12 weeks are going to fall, and it is estimated that the situation will worsen from week 27, with the lowest harvest figures expected to be recorded between weeks 30 and 37," said the entity. "The ratios in general continue to fall. The previous report, published on Monday, May 2, 2022, had revealed declines of 18.75%. As of week 21, 2022, the drop stands at 32.50%."
In the logistics area, "the lack of containers and shipping space also had a clear impact during the months of January, February and March due to congestion in major ports, especially in China. Shippers changed their routes to allow the ships to be full at all times. There was also a higher demand for reefer containers in China due to increased imports of pork and beef; but especially because China is exporting much more. All of the above has led not only to a shortage of containers, but also to rising shipping rates. This is having a strong impact on fruit sales in the spot market."
Ecuadorian banana exports have undeniably also been affected by the Russian war in Ukraine. "Due to the crisis in the country's economy, Russian importers have asked exporters in Ecuador for a reduction in the prices of banana boxes, as well as a reduction of their weekly purchases. Some have even canceled the contracts they had signed with certain exporters and have switched from contracts to spot purchases."
"The conflict between Russia and Ukraine (markets that account for 25% of all banana exports) which started on February 24 caused an already on-going crisis for the sector to worsen," reports Acorbanec. "An average of 8.1 million boxes per month were being exported to Russia between January and February 2022, fruit that was mostly contracted. Meanwhile, 929,000 boxes were exported to Ukraine (mostly on the spot) in January and 637,000 boxes in February. Due to the sanctions imposed on Russia, which took a toll on export logistics due to the lack of shipping space, the value of whatever little was available in the spot market tripled. As of May 30, 2.49 million boxes stopped being exported (if we take the usual exports of January and February as reference)."
Lastly, the increase in export costs during 2021, and maintained in 2022, "especially those of cardboard, plastics and security, has taken a negative toll on competitiveness."
"Summarizing, we could say that the current problem of low prices in Ecuador is mostly a result of the loss of competitiveness and the impact of the conflict between Russia and Ukraine (the latter actually caused some oversupply in other markets), in addition to the shipping companies charging extremely high prices for freight for both contracted and spot sales. Supermarkets are also said to be partly to blame, as although everything has become more expensive, they are not willing to pay more to the exporter, as they want to keep consumer prices low."