Mireya Carrera, on her banana farm in El Triunfo, Ecuador, on March 31, 2022 (AFP/Marcos PIN)
Ecuador, the world’s largest exporter of bananas, suffers from the consequences of international sanctions against Russia: unsold quantities, overproduction, low prices lead to the closure of production sites and forced unemployment.
The destination of 21% of Ecuadorean banana exports ($698 million annually), Russia has stopped receiving shipments since its invasion of Ukraine.
In a suburb of El Triunfo, a town near Guayaquil, where Ecuador’s main port is located, the show of transport trucks has come to an abrupt halt.
Conveyor belts are silent, cleaning troughs are empty and batches of stored bananas can fill six shipping containers, Miria Carrera laments.
“I used to fill three containers a week, about 3,000 boxes of 20 kilograms each,” laments the 62-year-old company manager, who has been growing 28 hectares of banana plantations called Chiquita for 35 years. “Today, I have 7,000 grapes without a buyer,” she breathes, annoyed, telling AFP.
It asserts that it has never had to face such a crisis because the decline in exports is exacerbated by the sharp drop in prices in the domestic market due to unsold goods.
“Every year the problem of prices with very low returns, but today it is impossible for me to sign a ‘decent purchase contract’, so I prefer to give away bananas,” says Mireya Carrera, whose employees left themselves.
Production halted at a banana farm in El Triunfo, Ecuador, on March 31, 2022 (AFP/Marcos PIN)
According to the World Bank, Ecuador was the world’s largest exporter of bananas in 2020 (revenues $3.83 billion), ahead of the Philippines (1.66) and Costa Rica (1.28). In the same year, the United States ($2.58 billion) was the main importer, ahead of China (959 million) and Japan (902).
But Ecuador is very dependent on the Russian market.
“One out of every five types of bananas that Ecuador produces goes to Russia, 20% of our production, and 2% to Ukraine. This war has really affected us,” laments Franklin Torres, president of the National Federation of Banana Producers (fenaba).
“Since the first week of the war, the banana boxes dedicated to these two markets had to be redirected, which caused prices to fall,” asserts Jose Antonio Hidalgo, director of the Banana Exporters Association (EPI).
“The production cost is more than $5.50 per case and the lowest price is $6.25 per case,” Torres says. However, buyers are currently offering “one dollar, two dollars at most”, “it really is a commercial insult” has been avoided, “we lost over ten million dollars in three weeks”.
Altogether, 1 million recipients were not found and “other markets, seeing that there was a surplus in Ecuador, started cutting prices,” notes the president of the Banana Marketing and Export Association (Acorpanic), Richard Salazar.
The Ecuadorean banana industry provides about 50,000 direct jobs and 250,000 indirect jobs. According to Akurbanik, the war in Ukraine made about 6000 permanent workers unemployed.
– Blessed –
An employee cleans bananas at a production site in Puerto Inca, Ecuador, on March 31, 2022 (AFP/Marcos PIN)
On the farm El Porvenir, located in the neighboring town of Puerto Inca, difficulties also accumulate.
Its director, Lourdes Cedeño, explains: “This week we have placed a container with 1,080 boxes of bananas, and what is paid to us ‘below the official price’ is used to pay wages” which were already reduced by 50% in March.
However, fixed costs are not decreasing and $1,500 per week is allocated to antifungal treatment on 25 hectares against banana leaf disease.
Producers, who showed their anger last week in Guayaquil by distributing free bananas, are calling for the government’s help, wanting it to buy unsold Russians for food aid programmes.
President Guillermo Laso gave them an end to non-acceptance, considering this idea “unrealistic” and that they should “look for other markets”.
But for the director of Acorbanec, “Finding another destination is a fantasy. There is no market in the world that can buy as many[Ecuadorean bananas]as Russia.”