Berliner Boersenzeitung - Ecuador banana industry slips over war in Ukraine

Ecuador is the world's largest banana exporter, but the sector has been hammered by the war in Ukraine. Now, with nowhere to send them, containers of the rotting fruit are piling up not far from where they were originally harvested.

"One in every five bananas produced in Ecuador goes to Ukraine and Russia," said Franklin Torres, president of Ecuador's FENABE banana producers federation.

"This war really affected us in that sense."

The vast majority of that portion goes to Russia, where banana sales are worth $698 million a year to Ecuador, which usually sends almost two million boxes of bananas a week to the eastern European neighbors.

But due to international transport sanctions over its invasion of Ukraine, Russia is not receiving its cargos of bananas.

The conflict has put the brakes on production in El Triunfo, close to Guayaquil, the site of Ecuador's main port..

"The banana producers are finished, I have not processed a single box for three weeks," said Mireya Carrera, 62, the owner of the Thalia banana plantation.

"The staff are leaving on their own without being fired because I cannot pay them."

She used to fill three containers with 3,000 20-kilogram (43-pound) boxes of bananas from her 28 hectare plantation.

"Now I have 7,000 bunches with no buyer," she told AFP.

- 'Price crisis' -

The industry had already been hit by falling prices.

Torres said it costs $5.50 to produce a box of bananas, and even though the internal sales price is $6.25, "right now we're receiving less than $2 for each box of bananas, we're receiving $1 or $1.20.

"Truly it's an insult to any type of business. What we're receiving is shameful and it's not even worth picking them."

He said the industry has lost "more than $10 million in three weeks."

"Every year we have the problem of low prices, but now it has become impossible to get a contract for bananas. I prefer to give them away," said Carrera.

Seeing Ecuador's surplus of bananas, other markets "have started reducing their price offers," said Richard Salazar, president of the ACORBANEC association for banana commercialization and export.

According to Jose Antonio Hidalgo, director of the AEBE association of banana exporters, within a week of the war starting, the bananas destined for Russia and Ukraine needed a new market, "causing a price crisis."

Around a million boxes have remained unsold in the last month.

Faced with the prospect of a surplus sending the domestic price plummeting, the banana business union decided to donate them to local food programs.

Ecuador has 160,000 hectares of banana plantations that in 2021 generated almost $3.5 billion in sales around the world.

The South American country has more than 260 banana exporters.

- Unrealistic utopia -

The banana industry generates 50,000 direct jobs and 250,000 indirect ones in Ecuador.

The war has already cost around 6,000 permanent employees their jobs, according to ACORBANEC.

The difficulties have also impacted he El Porvenir plantation in neighboring Puerto Inca, which neighbors Guayaquil.

Having sold a container with more than 1,000 boxes "what we received is to pay salaries," said the plantation's administrator Lourdes Cedeno.

El Porvenir already had to halve salaries in March as it was.

Banana producers, who protested in Guayaquil last week, want the government to help them out by buying their fruit for its food programs.

President Guillermo Lasso said that "is not realistic. We need to place them in other markets in the world."

But for Salazar, "Putting them in other markets is utopian. There's no other market in the world that can buy as much as Russia," he said.

(L.Kaufmann--BBZ)