Ecuadorian Banana Exports Up by 6% YoY in Q1-23 Driven by EU Sales

Published 2023년 5월 15일

Ecuador, the world's leading producer of bananas, closed the first quarter of 2023 with a 6% YoY in its exported banana volumes. The increase is seen as a strong recovery after a disappointing 2022 when export volumes decreased by 6.5% from the previous year. The increase is driven by what seems to be a market recovery in the European Union and Russia, as banana imports in these markets have risen. For Q1-23, the EU was the leading destination for Ecuadorian bananas, accounting for 31.22% of the total exports. However, one of the main reasons for the increased volume could be the low prices in the main importing banana markets for which banana producers demand supporting policies after severe production cost increases.

According to the Association of Banana Exporters from Ecuador (AEBE), the number of cartons shipped to foreign markets in the first quarter of 2023 was 96 million, a 6% YoY increase from the 90.5 million boxes exported in the same period last year. The increase is seen as a banana market recovery, mainly in European markets, after banana imports were hampered last year due to Russia's war against Ukraine. The conflict had an impact starting from the end of February 2022, which is the reason this first quarterly growth rate can only be a sign of recovery from last year’s start of the year.

In 2022, Ecuadorian banana exports were affected by the Russian invasion, logistical constraints, different strikes by political instability, and the dollar appreciation. The sum of these factors caused a 6.5% YoY drop in exports from January to December 2022 to 350 million boxes. However, for 2023, banana exports have started to increase in volume over the year's first three months. More importantly, the first quarter growth is driven by increased exports to the EU and Russia, as both markets have resumed their banana import volume.

Additionally to the destinations, it is important to note that January was the month with the most significant increase. January exports were 8.25% higher compared to January 2022, as there was a large harvest volume due to favorable weather conditions. In comparison, exports during February had a marginal increase of 0.8% as weather conditions curbed harvest volumes with a direct effect on exports.

Source: ITC Trade Map

The EU was the leading destination for Ecuadorian bananas during Q1-23, accounting for 31.22% of total exports. European block exports reached a total of 29.98 million boxes sent, with an increase of 22.67% compared to 24.44 million boxes exported in the same period last year. The EU was followed by Russia, which imported 24.60% of all Ecuadorian banana exports, which represented 23.62 million boxes, 7.93% more than in the first quarter of 2022 when despite the start of the war in Ukraine, 21.89 million boxes were exported.

The third destination market was the Middle East, to which 14.22% of exports were destined, with a total of 11.43 million boxes–representing a decrease of 11.26% compared to 12.88 million boxes shipped between January and March of last year. Exports to Middle Eastern destinations expanded in 2022 when plenty of supply intended for Russia ended up there, which is the reason for this year’s decrease.

The US increased its Ecuadorian banana imports by 6.34%, going from 8.90 million boxes in Q1-22 to 9.47 million in Q1- 2023. The US is usually the third-largest destination after Russia and the EU. It is expected to increase its Ecuadorian banana imports from the year's third quarter. Likewise, the United Kingdom reported an increase in its purchase level of Ecuadorian bananas, registering 1.19 million boxes, 29% more than in the same period of 2022.

Despite a clear recovery in volume, exports of Ecuadorian bananas will still need a competitive policy to support the sector in terms of prices. Production costs have severely impacted banana producers from Ecuador and other main producing countries since last year when agricultural input costs rose substantially. However, global banana prices haven’t increased in main importing markets, which opposed a significant threat to the industry in terms of profitability.