It is still too early to see increased volumes of banana exports from Ecuador to China, following the Free Trade Agreement (FTA) that recently started between the two countries. By 2024, Ecuador is experiencing lower export levels compared to the same period in 2023. An estimated 210.53 million boxes were exported by Week 29 (July 21, 2024), which is 1.90 percentage points lower than the figure reported during the same week in 2023, representing a decrease of 4.09 million boxes in absolute terms.
Jose Antonio Hidalgo, executive director of the Association of Ecuadorian Banana Exporters (AEBE), says "regions such as the EU, Russia, and the Middle East have been reducing their imports of Ecuadorian bananas. These negative results in these regions are driven by external and local factors. Externally, restrictions on ship transit in Panama have posed a significant obstacle to shipments and has increased its cost. In Europe, rising temperatures and increased competition from seasonal fruits have further reduced banana imports, especially those of dollar origins. Additionally, temperatures in banana-producing areas of Ecuador have been lower than in 2023, negatively impacting farmers."
He says other countries like the U.S. have helped sustain export levels with increases while Asia has also contributed to maintaining exports. The Asian region accounts for 6.26% of Ecuadorian banana exports. By Week 29 of 2024, a total of 13.09 million boxes have been exported. Compared to the same period in 2023, this represents a 5.05% increase and an additional 628,000 boxes in absolute terms.
Too early for results of FTA with China
"The trade agreement between Ecuador and China, aimed at gradually reducing tariffs on bananas, has shown mixed initial results during its first three months of implementation. This agreement, in effect since May 1, 2024, has generated significant expectations in the Ecuadorian banana sector, with the goal of establishing China as one of the main markets for Ecuadorian fruit," states Hidalgo.
China emerged as one of the top markets for Ecuadorian bananas, ranking fifth by the end of 2023. By Week 29 (July) of 2023, China represented 4.05% of total Ecuadorian banana exports, while during the same period in 2024, this share decreased to 3.40%.
"Despite high expectations, initial data indicate a decrease in both the volume and value of exports. During the first quarter of 2024, Ecuadorian exports experienced an increasing trend. However, from April to mid-July, this trend reversed, and export values have been consistently lower than those reported during the same period in 2023. These results should be interpreted cautiously. With only three months of data available for export volume, it is not yet possible to definitively determine the agreement's effect, as markets need time to adapt to the new tariff conditions.
Hidalgo highlights the importance of a long-term vision for trade agreements. "Our goal is to make China one of the largest markets for our bananas. Expectations are high, especially as China's demand for high-quality imported fruit has grown." He also emphasized the need for coordinated efforts between the government and the private sector to achieve positive results.
"The trade agreement between Ecuador and China marks a significant milestone for the Ecuadorian banana sector. Although initial results have been mixed, the long-term potential is substantial. With a coordinated strategy and sustained effort, China is expected to become a major market for Ecuadorian bananas. AEBE, through its Banana Statistical Observatory, will continue to closely monitor this market's development."
He says the new Chancay Port in Peru, will be used by the Chinese shipping company Costco to decrease shipment times of bananas from Ecuador to China. "We met with Costco, who say shipments from Guayaquil in Ecuador via the new port of Chancay to Shanghai will take 7 days less than now. Then, from Ecuador to Dalian in China the shipments will take 10 days less than we have now," concludes Hidalgo.
Visit the Ecuadorian banana industry at Asia Fruit Logistica, Booth 3-3F02.
For more information:
Jose Antonio Hidalgo
AEBE
Tel: +593 96 402 9141
Email: [email protected]
www.aebe.com.ec