A trade agreement between Ecuador and the United Kingdom entered into force. From January 1, 2021, the exportable offer from Ecuador enters without paying tariffs to the United Kingdom. The agreement was signed in May 2019.
The Minister of Foreign Trade, Iván Ontaneda, reported that the trade agreement between Ecuador and the United Kingdom entered into force as of January 1, 2021.
According to Ontaneda, the agreement allows 95% of the country's exportable offer to enter British territory without paying tariffs.
With the validity of the agreement, Ecuador maintains the tariff preferences that were reached with the United Kingdom, when this country was part of the European Union (EU).
Precisely the commercial instrument entered into force on the same day that Brexit was consummated or the United Kingdom left the EU.
On the other hand, in 2019 Ecuadorian exports to the British market represented USD 166.1M. Bananas are the most demanded product, according to information from the Central Bank.
Source: Acuerdo comercial entre Ecuador y Reino Unido entró en vigencia
Shrimp-prawns and bananas are the top two exported products. The third place is be fish, mainly tuna with HS code “1604”. Then cocoa beans and cocoa preparations holds the 4th position as a major exported product with its HS code “1801”.
At the present, Ecuador is the global leading supplier of bananas. The country holds approximately 23.4% of the global export share. Despite Ecuador’s small geographic area, the country is considered a powerful and important supplier of shrimps & prawns, fish, and cocoa representing global export shares of 5.6%, 7.5%, and 6.5% respectively.
MAJOR EXPORTED PRODUCTS
1. US
Second-largest import market, but is heavily dominated and monopolized by large players such as Dole, Del Monte, and Fyffes.
2. Europe
-UK, Spain, France, Germany, Netherlands, Belgium (small market, organic)
-Biggest market for organic bananas
-Scandinavia is a niche market for organic bananas that is growing every year.
3. Russia
-Largest import market.
-Stable importer. Usually engaged with small or medium-sized exporters (growers).
4. Asia
- S. Korea, Japan, China: premium prices around USD 8-9 FOB per box
-S. Korea operates on a fixed program (contract).
-Chinese demand is extremely unstable. Prices will rise substantially or decrease to as low as USD 2 per box if there is good production from the Philippines.
The Top 10 exporters take up 42.36% of the market share, with the non-top 100 exporters’ share taking up 8.4% of the market. In general, there is still room for small-scale farmers to trade in the market.
Los Ríos (37.14%) is the province with the highest banana production. Then follows the province of Guayas (32.25%) and in the third position El Oro (24,12%). (Source: MAGAP Ecuador, Map of estimated banana cultivation area 2021 in mainland Ecuador).
Similar numbers reveal the “Situational analysis of banana crops from the MAGAP” where it appears the same top three the provinces with highest banana production (Source: Agricultural Public Information System of Ecuador, SIPA).
If we look at the number of growers, the ranking reveals a very different outcome in 2021. Therefore, considering the number of Agricultural Production Units (UPA), banana growers are mainly located in El Oro (14.68 % UPA) and in smaller numbers in Los Ríos (12.09 %) and Guayas (11.18%).
This difference between the distribution of production and the number of farms is because El Oro has the largest number of small banana growers. On the other hand, in Guayas and Los Ríos are located the big growers. Therefore, in 2021 the yield per hectare is smaller in El Oro than in the two other regions.
Bananas in Ecuador are a whole year seasonality product. During the 52 weeks of the year, banana producers cultivate their plantations parallel with the harvest labors. Approximately, mid-December up to next year’s mid of May develops the “high season” when production hits its highest peak. The upcoming time phase is categorized as the “cold and low season” when production falls.
UNECE Classification for Bananas
- Slight defects in shape and color;
- Slight defects on the skin due to rubbing and other defects such as sunburns and blemishes not exceeding 5% of the total surface area.
The defects must not, in any case, affect the flesh of the fruit.
- Defects in shape and color;
- Defects on the skin due to rubbing and other defects such as sunburn and blemishes not exceeding 10% of the total surface area.
The defects must not, in any case, affect the flesh of the fruit.
The banana in all classes, subject to the provisions for each class and the tolerances allowed, the banana should have the minimum quality requirements:
In addition, hands and clusters must include a sufficient portion of the crown with or without peduncle fragments, sound, and free of fungal contamination.
Aside from Fusarium TR4, Sigatoka is caused by Ascomycete Mycosphaerella Fijiensis Morelet. The disease attacked the leaves primarily significantly reducing the photosynthetic capacity of the plant thereby hampering its ability to maximize yields. The pathogen produces conidia and ascospores, both of which are infective. They are formed under high moisture conditions and are disseminated by wind, and in the case of conidia, also by rain and irrigation water. Due to their greater abundance and small size, ascospores are more important than conidia in spreading the disease within plants and plantations.
There are some key factors that determine the prices of bananas: