Ecuador: Guatemala and Peru, are threats to banana industry

Banana Volume

The Central American country improves its productivity, the Andean nation increases the sale of organic fruit.

The banana industry of Ecuador has narrowed down in the world fruit market two new rivals. Guatemala and Peru have become a threat to Ecuador in the production and marketing of conventional and organic bananas.Although Costa Rica and Colombia have been the historical competitors, who have tried to take first place from the country as banana exporters, traders view with suspicion the giant strides recorded in Guatemala in banana crop levels. Their productivity reaches an average of 3,500 boxes per hectare annually, compared to 1,800 boxes produced in Ecuador.

Vincent Wong, president of the banana company Reybanpac, says that concerns could be greater if the geographic position is also taken into consideration. An advantage that the Central American country provides to tempt with its fruit to the U.S. market. “It will be a future competitor in all the west and eastern  coast of the United States, where the fruit comes in just two days trip,” which lowers costs, mentions the employer.

And if Guatemala poses a risk, Peru has won a battle in the organic banana market. 10 years ago, Ecuador was the second largest exporter of this type of Musaceae, but now it dropped to fifth place. The first position is for the neighboring country, which silently has been taking over this niche market.

According to  Agraria.pe in the first quarter of this year, Peruvian exports grew 30%, which meant a sale of $18 million, compared to $10 million that, on average, the country recorded during the same period of 2011.

The throne that Ecuador occupies in the worldwide sale of conventional bananas, has not served as a push to strengthen the production sector which is increasingly required by Europeans and Americans  who are looking for safe and nutritious food, says Salomon Larrea, banana expert.

In three years, organic bananas sales fell from 250,000 cases a week to 130,000, according to figures from the Association of Banana Exporters of Ecuador (AEBE). The decrease is explained by the disincentive for producers due to high costs of cultivating without the use of chemical in crops and should have international certifications.

>Although its participation is still minimal (this type of musacea represents 3% of the banana world market), Larrea says that we should not dismiss the expedited demand which is recorded in more developed countries that prioritize the purchase of environmentally friendly foods. “I do not think we are missing an opportunity, but we are being left behind,” says Larrea.

While Peru’s success is attributed to the excellent weather conditions that country has to cultivate organic bananas (areas with low rainfall, which prevents the Black sigatoka from sprouting, a plague that must be attacked with chemicals), Larrea claims that in Ecuador there is also a possibility to exploit specific soils.

Antonio Sotomayor, owner of 50 hectares, in Rivers, also agrees with this view and questions if “organic agriculture is left to chance in the country, although the Constitution and other laws support this kind of production.”

Sotomayor believes that organic food consumption will get stronger at an international level, hence it is requested to the Government to promote the sector, with credits and training. “It’s a stable business that if it is well managed, it generates good earnings (at least $7 per box),” he says.

Although the presence of Guatemala and Peru represent a risk at long term, there is another negative factor that begins to cause discomfort in the sector.

Ecuador is consolidated in the world market, but its position could be affected as of this year, if one takes into account the low production levels that are being faced as a result of this past season´s winter.

From January to May 2012, the country exported 15 million boxes less, compared with the previous year. “Many are saying that that this trend is going to be kept and that eventually we will have 30 million boxes less,” says exporter Wong.

Source: Fresh Plaza

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