"The logistics crisis in the Red Sea has been one of the biggest recent challenges, as banana shipments had to be redirected through southern Africa, raising transport costs. Initially, freight rates rose by as much as $3,000 per container. Now they have stabilized, but we still expect them to go down again," stated Marianela Ubilla, general manager of Agzulasa.
"In addition, the lack of empty containers in Ecuador is a persistent problem. China has withheld equipment, and the massive export of cherries from Chile affected the availability of space for Ecuador. However, there is optimism with the arrival of 100 new container blocks on the China route via Costco Shipping Line," she said.
Agzulasa exports 260 containers a week from Ecuador, with an annual projection of 14 million boxes. Its core markets include Asia (China, South Korea), Central Asia, Russia, Northern Europe, and the Middle East (Saudi Arabia, Dubai, Qatar, and Jordan, among others).
The banana sector has had to adapt to new agrochemical regulations in the European Union and Asia. "Each country bans different molecules, which has been a challenge for production in Ecuador. It took us more than four years to adjust our insect management to the molecules permitted by the markets, thus managing to comply with the required standards," Ubilla stated.
"Ecuador is still free of Fusarium race 4, although the banana mucus has affected some plantations, especially in the rainy season. An estimated 3,000 hectares have been affected, but thanks to monitoring programs and cooperation between companies and associations, the disease is under control," she said.
"Maritime freight and export costs have increased between 20% and 40%, depending on the destination. However, the market continues to show demand. Russia has maintained its freight levels despite geopolitical uncertainty, while Europe and China have seen significant increases," Ubilla stated.
The minimum price of bananas in Ecuador was set "at $7.25 per box for the 2024/25 season, i.e. $0.40 higher than last year. This increase has generated difficulties in closing contracts with importers, but it also provides stability to producers," she added.
"Russia continues to be an important destination, with smooth transactions despite the geopolitical situation. The Middle East also remains strong, albeit with higher logistical costs."
"The Ecuadorian banana market faces a scenario of uncertainty due to geopolitical tensions and rising logistics costs. However, improvements in container availability and new trade routes are expected to help mitigate these issues. The evolution of freight costs and international trade policies will be key factors for the competitiveness of the sector in the coming months. Maintaining quality standards and adapting to new regulations will continue to be key to remaining in international markets," Ubilla stressed.
For more information:
Marianela Ubilla
Agzulasa
Guayaquil, Ecuador
Tel: +593 98 985 2027
Email: mubilla@zulay.com
www.ecuasabor.com