Ecuador: Aldi lowers banana box price
The banana sector is concerned by Aldi’s decision to lower the box’s price a dollar between January and March this year, and by the possibility that Del Monte replaces the Ecuadorian fruit, which is less competitive, with that from Honduras.
German retailer Aldi (the largest European retailer and a reference price in the European market) set the price of a box of bananas for distributors at 14.21 Euro for this year’s first quarter. Some providers warned that the increase “will barely cover the increased costs of the supply chain.”
The price set is the same as that in the second half of 2013 and well below the average for the first three months of 2013, 15.97 Euro per box. It is also the third lowest average of the last decade.
This decision implies a blow to Ecuador, whose fruit, according to marketers, has become more expensive and therefore less competitive than that of Colombia, Costa Rica, Honduras, Guatemala and other providers.
The distributors who supply Aldi usually cover the losses they sustain during the summer months with the higher prices in the first quarter.
The weather has also affected the supply. There still is a lot of fruit at the ports looking for buyers because the ships can not enter Russia, as the route to St. Petersburg has frozen, and many people in the U.S. are still immobilized by snow.
Russians bought 36.4% of the total volume in the penultimate week of 2013, 895,064 boxes, while the second most important country bought 841,000 boxes.
According to Reefer Trends, Ecuadorian banana suppliers will be left at a serious disadvantage against competitors from America, as they will be spending 17 Euro more per tonne, 0.31 per box, to enter their product into the European Union.
Gustavo Marun, president of Aproban and producer from Los Rios, revealed that, faced by this situation, the group created by the government to study mechanisms to increase the banana’s competitiveness would analyse other supplier countries. He also stated that he believed foreign consumers still preferred Ecuadorian bananas.
Ecuadorian banana producers are also stressed because Del Monte might replace their bananas with those from Honduras. According to local banana producers, the company has already contracted 5 million boxes from Honduras, to supplant what was traditionally bought from Ecuador.
Del Monte, which, according to information published by the Association of Banana Exporters, sold 242,123 boxes in week 50 2013, ranks third in the country’s foreign sales of bananas.
The banana sector expects to sell about 250 million boxes for nearly 2 billion dollars this year.
Publication date: 1/14/2014