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Ecuador suspends preferential trade with US over Snowden affair

Move will see tariffs introduced on agricultural exports
Ecuador suspends preferential trade with US over Snowden affair

Ecuador has made the surprising announcement that it is giving up its preferential trade agreement with the United States, a move which could have serious repercussions for agricultural industry. The shock news comes in the wake of the ongoing Edward Snowden affair.

The former CIA agent, turned whistle-blower, is though to be seeking asylum from Ecuador. The country is gaining something of a reputation for sheltering those involved in the leaking of government secrets and is currently housing Wikileaks’ Julian Assange in its London Embassy.

Ecuador’s Minister of Communications, Fernando Alcarado, announced the decision, saying, the country “unilaterally and irrevocably renounces…trade preferences.” He described the decision as a demonstration of Ecuador’s commitment to its values and a sign that it would not allow foreign powers to influence national sovereignty via the exertion of commercial pressure.

Ecuador, he said, “doesn’t accept…threats from anybody and it doesn’t trade its principles or give them up for commercial interests, no matter how important.”

Ecuador’s left wing president, Raffael Correa, has sought to calm concerns on the domestic front over the move, stating that the suspension of preferential trade, which will see the introduction of tariffs on exports, including broccoli and bananas, would have limited impact.

Other have been quick to disagree, pointing out that the relatively straightforward trade processes with the US have turned certain Ecuadorian enterprises into major international industries. Romiro Crespo, of Quito based Analytical Investments, said, “If commerce is restricted there’s going to be unemployment…this does not penalise the government, it penalises the people.”

Just how effective a gesture this proves to be remains to be seen of course and, currently, the prospect of Snowden, who is trapped in international limbo at Moscow airport, making it to Ecuador and one of its embassies is very small, his passport having been revoked by the US authorities.

Publication date: 6/28/2013
Author: Ben Littler

Ecuador raises banana price 9%

Ecuador raises banana price 9%

A box of Ecuadorian bananas for export will cost $ 6.55 in 2015, said the Ministry of Agriculture of Ecuador.

The new price, 9% higher than the current $ 6, was set by Ministerial Agreement and approved Thursday and will come into force from January 1 until December 31 next year.

Ecuador, the leading exporter of bananas and the fourth largest producer in the world, sold a total of 253 million boxes of bananas in 2013, 5 million more than in 2012, which totalled 248 million, according to official data.

In 2014, the Association of Banana Exporters of Ecuador (AEBE) expect to export 290 million boxes of bananas, representing a record against the major peak of exports achieved in 2011, which was 283 million boxes. The main buyers of the Ecuadorian fruit are the United States and Europe.

Ecuador last July reached an agreement with the EU, but is awaiting final approval of documents by the Ecuadorian legislature and of the Council and the European Parliament for its entry to be put into force.

Publication date: 11/28/2014

Fall mangos will be sourced largely from Brazil and Ecuador

With Mexico ending a bit early, Brazil and then Ecuador will be the main sources for mango supplies for the last third of the 2014 calendar year.

Typically, Mexico lasts well into September overlapping the Brazilian deal, which usually gets underway in August and has an eight- to 10-week shipping window before greater volume from Ecuador hits the market in late October and early November.

But this year cold August weather from Mexico to South America resulted in an early end to the Mexican deal and a late start for Brazil.

Albert Perez, managing member of Continental Fresh in Coconut Grove, FL, whose company specializes in Brazilian mangos, told The Produce News in early September that the Brazilian deal was running about three weeks behind schedule.

He said the firm usually gets some Brazilian mangos by the middle of August, but this year the first ship didn’t arrive into Miami until Sept. 5. He expects volume to be light through September and peak in October with good supplies in November as well.

Perez was cautiously optimistic that the Brazilian deal could capture some sales at the back end, but that will only occur if Ecuador is late, extending Brazil’s marketing window.

Sabine Henry, who is involved in tropical fruit sales for Central American Produce Inc. in Pompano Beach, FL, explained that because of the freight cost differential, Ecuadorian fruit lands in the United States at a lower cost point. And the greater volume usually leads to a market price drop. Brazil then finds it difficult to get the prices it needs to ship to North America.

At that point, which is typically late October or early November, Brazilian shippers look elsewhere for buyers for their production.

Agreeing that timing is everything, Isabel Freeland, vice president of Coast Tropical in San Diego, said this year might offer a very good timeline for fruit from Brazil, Ecuador and Peru. She spoke to The Produce News Sept. 10, one day after returning from a two-week trip that included stops in Ecuador and Peru.

“Brazil is very late,” she said. “They are two to three weeks behind last year, and it looks like they are going to have 30 percent less volume than in prior years.”

This has led to a strong market, which Henry of Central American said was at a solid $ 9 during the week of Sept. 8.

Freeland said Brazil’s late start would normally result in a shorter deal, but that might not be the case this year.  

“Ecuador is also late,” she said. “They don’t look like they are going to get started until week 39, which is the week of September 21. They won’t ship until week 40 [the last week of September], and that will only be the Ataulfos (yellow-skinned mangos). The red fruit, which is what competes with Brazil, won’t start until around October 15.”

With that start date, Freeland does not expect red mangos from Ecuador to hit the U.S. market until very late October, giving Brazil great access to the U.S. retail trade through that month and into November. If that occurs, Brazil can still achieve about an eight- to nine-week market widow unfettered by cheaper fruit.

After surveying some orchards and talking to people in the Ecuadorian mango industry, Freeland believes that country will also be down as much as 30 percent for this year. On the plus side, she expects the volume to be more evenly spread out over a two-month period, creating better marketing conditions.  

Following Ecuador, Peru should enter the U.S. market with fruit by early January. This will also be a bit late, as Freeland said the same weather issues affecting Mexico, Brazil and Ecuador are affecting Peru.

“I was just there last week and it was very cool in the nights,” she said. “You never have to wear a sweater in the evening, but I had to on this trip.”

Peru should have a good supply of mangos throughout January and well into February. Freeland said that despite the reduced volume from the Central America and South American countries this fall, there should be promotable volume from these countries throughout November and well into December and then again in January and February.  At that point, Mexico will have fruit again and the cycle will begin anew.

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Banana from Ecuador continues to gain ground in China

Ecuador is currently the world’s largest banana exporter and, in the past, it used to lead the Chinese market, as it exported more than 300,000 cases of bananas a week to the Chinese market. 

“Exports in the 80s began thanks to the visionary effort of Segundo Wong, primarily in the form of barter. He was very successful but we began to lose market share, not because of the fruit’s quality but because of the costs, the lack of shipping logistics, and the cheap fruit from the Philippines and other producers. It was very difficult for us to compete and the companies with the biggest share stopped sending fruit,” recalled Eduardo. 

“We were sending a very small quantity to China, but in recent years, thanks to a rise in consumption, the conflict with the Philippines and the drop in production in countries such as Colombia, Costa Rica and the Ivory Coast, we have greatly increased the volume of exports,” he said.

The tension due to the territorial dispute of the South Sea between China and the Philippines, the second largest exporter of bananas in the world, has increased over the years, which has brought complications and impediments to trade between the countries of the region; a situation that, at first sight, seems favourable for Ecuadorian exporters. 

“We have increased the volume of exports and a large number of major reputable importers from China are looking to import larger amounts; not only because of the conflict with the Philippines, but also because of our quality. “


There are several factors affecting the competitiveness of Ecuador in the Chinese market. 

Ecuadorian bananas require 35 days to arrive at the port of Shanghai, while the bananas from the Philippines only require 3 to 5 days. In addition, Ecuador must pay 10% in tariffs to enter the Chinese market, plus a tax for crossing the Panama Canal, while its Asian competitor is exempt from any fees. 

“Ecuador’s working conditions and workers’ wages are much higher than in most other producing countries, which entails a higher cost of production,” says Ledesma García. 

“Nevertheless, we are selling more and more bananas to China. This year we exported, on average, 217,000 boxes a week, and up to week 25 we had shipped about 4.127 million boxes.”

Looking to the future 

Even though production is at its highest level since 2011 and the level of exports to China is booming, the executive director of the AEBE stressed the need to focus and improve productivity. 

“Currently, we are getting about 1,700 boxes per hectare. We must improve and exceed the 2,000 boxes, “said Ledesma, who added that,” we must also improve logistics with China and reduce transport time to just 25 days by hiring a loose cargo.”

If carried out, these improvements could increase the presence of Ecuadorian crops on Chinese soil and, in turn, would make them more resilient to a possible future resolution of the conflict between Chinese and Filipinos. 

Finally, when asked about what he wished for the future of Ecuadorian banana exports, Ledesma García replied, “I want us to be exporting 400 million boxes, which would cause many countries to stop producing bananas.”

Ecuador: Aldi lowers banana box price

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

Ecuador: Banana producers demand a rise in the price of a box of bananas

Ecuador: Banana producers demand a rise in the price of a box of bananas

Paul Gonzalez, a banana leader, deems it necessary that the price of bananas increases, after taking into account several factors, mainly about production.

Gonzalez said that he had met with other banana leaders several days ago and that they had discussed various points to ask for an increase in the value of a box of bananas, which is currently $ 6.00 dollars.

He said that several points were taken into account, including production. On this occasion, he said, they were basing the increase in the price of a box of bananas on the rise there was in the unified basic salary.

A factor that hasn’t been taken into account in previous years to raise the price of a box of bananas, but that, according to Gonzalez, has a big impact on the value of the fruit. Another key point for raising the price is the evaluators’ service, which is paid by producers.

The banana leader said that the importers and exporters, who are the ones that are interested the most in the banana’s good quality, had to pay the evaluators. In addition, Gonzalez said that they also had to consider the unexpected when increasing the price of a box of bananas, something that the Ministry of Agriculture, Livestock and Fisheries hasn’t taken into account when allocating the price of a box of bananas.


Publication date: 10/10/2013

Kingston getting an early start on Ecuador mango program

Kingston Fresh announced that its mango crop from Ecuador will get an early start this year, which is fortuitous timing considering the high customer demand for the fruit.

“Kingston is excited to announce the first arrivals of the season of our Ecuadorian mangos,” Ken Nabal, president of Idaho Falls, ID-based Kingston Fresh, said in a press release. “Although volume will be light to start, it will be much anticipated to help fill Kingston-Ecuador-mangoKingston Fresh mangos from Ecuador.a supply void left from reduced mango volumes from Brazil year to date. Our first containers will be shipped during the week of October 9.

“Overall quality looks great to start and season forecasts call for volumes similar to last season,” Nabal added in the press release. “The size profile will be heavy to 10- to 12-count calibers with peak volume slated for the mid-November through mid-December period, which is ideal for key holiday retail promotions.”

The company announced earlier that is has changed its name to Kingston Fresh as part of a rebranding initiative.

“For over 40 years our customers, with good reason, have had great confidence in the ‘Kingston’ label,” David O. Kingston, chief executive officer of Kingston Fresh, added in the press release. “As we continue our aggressive imports expansion plans, which include mangos, rest assured that the Kingston logo will be prominently displayed along with its ‘Planting to Plate’ tag line that emphasizes the company’s relentless commitment to food safety and quality.”

The Produce News | Today’s Headlines

Ecuador: Revolutionary banana technology

Ecuador: Revolutionary banana technology

The country of Ecuador is about to introduce a new strategy to advertise bananas. According to an article in Fox News Latino, Ecuador is teaming up with a United States marketing firm to develop a new method of advertising.

All outgoing bananas will now have a QR code placed on them. Various companies have been using this technique to promote sales. Soon, banana sellers will be able to take advantage of this as well.

Customers will have the opportunity to scan the QR code sticker on the banana peel. This will take them to a video that explores scenic locations around Ecuador, encouraging tourism. The country has business partnerships with major banana distributors such as Dole, Del Monte, Noboa, and Chiquita. They hope that they can reach a wide market with their new advertising idea. They also hope to create their own marketing brand that is focused on generating revenue in tourism. People purchasing the bananas and viewing the videos will see the lifestyle behind their food’s origin.

“It’s amazing what technology is capable of nowadays,” says Thomas Hoey. “Almost everyone uses a smartphone so Ecuador’s new strategy will be really effective. When people bite into an imported banana, they’re getting a taste of another country. Now, they can go even further and take a little sightseeing trip through their phone. It really is impressive.”


Publication date: 8/7/2013

Ecuador: Taxes on export bananas may be eliminated

Ecuador: Taxes on export bananas may be eliminated

The Minister of Agriculture, Javier Ponce, said recenlty that there are plans to eliminate the taxes being paid exclusively by the banana industry; 0.7% of the FOB value of each banana box.

This tax was initially assigned to Corpecuador and since 2009 it is collected by the Ministry of Agriculture; institution which, according to banana growers, has raised more than $ 21 million on this account.

“Together with the Central Bank and the Inland Revenue Service, we are in the process of eliminating that tax which has entirely lost its significance,” he pointed out.

Regarding the drop in exports during the first semester of the year, the vice-minister Luis Valverde stated that there was a lower production during that period due to the weather, which prevented bunches from reaching good sizes.

Ponce also informed about the elimination of the 9 dollar payment for every 1,000 banana boxes inspected by the phytosanitary authorities at packing houses, storage centres or ports.

The Minister explained that this was one of the banana sector’s requests to the president, Rafael Correa, through a letter posted last May; a law that came into force last month. This tariff was collected by the Agricultural Quality Assurance Agency (Agrocalidad).

“We have already sorted out the elimination of those $ 9 in taxes collected by Agrocalidad; that is already solved,” assured he in a press statement in Guayaquil.

For Giovanny Coronel, president of the Association of Small Producers of Guabo, it is a positive decision, as it prevents a decrease of added value in an activity which already offers a very low profitability.


Publication date: 7/12/2013