Weekly Product Updates

W46 Banana Update: Uncertain Outlook for the Colombian Banana Industry and Banana Export Suspension to Argentina from Bolivia and Paraguay

Fresh Banana
Published Nov 22, 2023

The Colombian Banana Industry is Facing an Uncertain Outlook for 2024

In W46 in the banana landscape, the Colombian banana industry is facing an uncertain outlook for 2024 due to inflation, strong competition from Ecuador, and strict environmental requirements from the European Union (EU). Colombia's inflation reached 10.48% in Oct-23, falling for the seventh consecutive month; however, it remains significantly higher than inflation in the US (3.7%), the EU (4.3%), and the United Kingdom (UK) (6.7%). Moreover, given a weakened economy in the EU, the primary destination for Colombian bananas, a drop in EU banana imports can be expected.. It is worth noting that, from Jan-23 to Aug-23, the EU experienced a 14% decrease in Colombian banana imports, while Ecuadorian banana imports increased by 13%. On the other hand, the added social, environmental, and labor values to the Colombian banana industry will be an advantage for them to enter large supermarkets in Europe.

Bolivia and Paraguay Suspended Banana Exports to Argentina

On November 15, Bolivia and Paraguay suspended banana exports to Argentina due to non-payment. According to Infobae, Argentine fruit importers owe USD 10 million to Paraguayan producers, mainly in Caaguazú, San Pedro, and Cordillera regions, and about USD 12 million to Bolivian producers concentrated in the Cochabamba region. The pending payment is due to the slow release of US dollars for import processes in Argentina. As an effect, around 2,500 families in Paraguay have been directly affected, and the entire value chain has been disturbed. Moreover, in Bolivia, the failure of payments from Argentina importers has led many Bolivian companies to go into financial crisis. Although the Argentine Industrial Union (UIA) has raised concerns about the ongoing issues, it is unlikely to be solved quickly since many other sectors faced the same difficulties during this period.

Ecuador Launched a Campaign Against Illegal Banana Trading

The Banana Cluster of Ecuador launched a campaign in Nov-23 to prevent increasing illegal banana trading activities since insecurity has become a national problem in Ecuador. The campaign aims to create awareness and inspire industry players to refrain from purchasing inputs or machines with uncertain origins or proper sales documents like invoices. According to the Executive Director of the Association of Banana Exporters of Ecuador (AEBE) and the Banana Cluster of Ecuador Coordinator, the stolen banana value losses would amount to about EUR 1.03 million annually, not counting the cases that have not been reported. In addition, the National Police and the Tax Administration (SRI) also participated in the campaign, urging individuals to report any irregularities in the trade.

Panamanian Union Declared an Indefinite Strike Against Law 406

Lastly, on Monday, November 13, the Panamanian Union representing workers in Panama's banana and other agricultural sectors declared an indefinite strike against Law 406, which permits the exploration and exploitation of Cobre Panamá, a copper mine in Panama, for 20 years, with the option for renewal for the same length of time. In addition, the union is asking Chiquita Panama to enter into a dialogue with the government about repealing the law. The estimated strike loss in this region is over 200 thousand bunches of bananas per week.

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