Ecuador to decrease banana production to avoid oversupply

The current oversupply of bananas in Ecuador has caused a drastic drop in the export price (Fresh Plaza, 5 June). Producers currently receive $2–4 per box, even though the minimum support price stands at $6.40 per box. The National Federation of Banana Growers of Ecuador (Fenabe) announced on 3 June that its members will reduce banana production by 10% to reduce the volumes available and to regularise prices in international markets. “Low prices are due to an oversupply. There were weeks we exported 8 million boxes when we normally export 6.5 million,” stated Franklin Torres, President of Fenabe. The seven associations that make up Fenabe produce 400,000 boxes per week; with the reduction they will produce 360,000 boxes. Fenabe will continue to donate fruit that is harvested and not shipped to the population affected by the Covid-19 health crisis.

EU and Mexico moving towards a new trade agreement

The European Union and Mexico have completed the last stage of negotiations for a new trade agreement (Fresh Plaza, 5 June). The negotiation was started in 2016 and will probably enter into force some months from now, as the text needs to be approved by the Council and Parliament. The agreement with Mexico stands out because it includes issues that have not been previously taken into account in such agreements, such as environmental issues, and includes the commitment to effectively implement the Paris Agreement on climate change. The trade protocol is part of a broader agreement that also covers the protection of human rights and contains chapters on political cooperation and development cooperation. This will also be the first EU trade agreement to include provisions to fight corruption, with measures to fight bribery and money laundering, according to a note from the European Commission.
Regarding the Spanish-Mexican fruit and vegetable trade, the volumes exported by Spain are very low, although they have been growing in recent years (from 12 tons in 2015 to 879 tons in 2019, mainly due to plums). Spanish fruit and vegetable imports from Mexico are higher, totalling 41,588 tons in 2019 – mostly avocadoes, bananas, lemons and mangoes.

Drop in Cameroun’s exports

In May 2020, Cameroon’s banana exports dropped significantly after a disappointing first quarter, which saw exports drop by over 13,000 tons (Business in Cameroon, 5 June). According to figures compiled by the banana exporters’ association Assobacam (Association bananière du Cameroun), the volume exported by the country in May 2020 was 11,872 tons, compared with 16,135 tons in May 2019, a drop of 4263 tons. The main player, Plantations du Haut Penja (PHP), local subsidiary of Compagnie fruitière, exported only 10,795 tons of banana in May 2020, compared with 14,639 tons during the same period in 2019 – a gap of 3844 tons. Small player Boh Plantations saw its exports fall from 1496 tons in May 2019 to 1077 tons a year later (a drop of 419 tons).

A COLEACP partner in Cameroon reports that, in the wake of difficulties caused by security challenges throughout 2019, further heavy losses are being experienced in 2020 due to the coronavirus. Many markets are closed and the planes are grounded. This situation has led to losses due to plots of land not being harvested because produce cannot be exported. Many producers no longer have the cashflow to continue their activities. Small activities such as small shops, restaurants, bars are all in slow motion and a lot of others are at a standstill. Many employees are on technical leave or laid off. During this period the company has been receiving small orders, but transport via the existing air freight routes is very difficult and can result in produce (such as pineapples) being abandoned en route or delayed too long, and transport is at a super high rate (twice as much as the normal high price). For this company, the closing of the borders took place while they were preparing for the renewal of the GlobalG.A.P. certificate. As the auditors came from Côte d’Ivoire, the application for certification was suspended. The Covid-19 situation will have repercussions on the next fruit and vegetable export campaigns, particularly on pineapple, because during this period, many producers have not planted due to lack of means.