ANALYSIS OF THE BANANA JUNCTURE 2001-2000

1. THE BANANA SECTOR IN THE ECONOMY

During the last three years exports continued been a very important aspect for the Ecuadorian economy regarding its GDP as well as for total exports of Ecuador. For the year 2001, banana exports accounted for with 5 percent in the total GDP and with 44 percent on the agricultural GDP.

Regarding global exports, during 2001 the banana activity accounted for with 19 percent and constituted 42 percent of agricultural exports. It’s important to highlight that during last three years the banana participation in the whole agricultural exports have increase, but not in the total exports which showed a reduction compared with 1999 but a slight recuperation compared with the year 2000. This situation is caused by banana international prices movement during last three years and oil prices behavior, favorable during last two years.

GRAPHIC – CONTRIBUTION OF BANANA IN THE EXPORTS SECTOR

2. PROVINCIAL AREA AND DISTRIBUTION

Banana exports area registered by the Ministry of Agriculture and Livestock during the year 2000 was of 147,280 hectares at a national level, with the participation of 5,975 producers. The exports’ area at a provincial level was:

Source: Undersecretariat of the South
Coastal area and the Galapagos Islands

However, there is the criterion that the area over which the banana exports are founded, is higher than that registered by the Ministry of Agriculture and Livestock, which means that fruit comes from non-qualified plantations.

3. EXPORTS BEHAVIOR

According to Empresa de Manifiestos, total banana exports during the year 2001 were of 3’990,427 MT, 5 percent lower than the year 2000 exports: 4’221.599 MT. During the year 2001, 860,485 million dollars were registered, i.e., 7 percent up than the amount registered in the year 2000: 802,973 million dollars.

Eighty four percent of banana exports are addressed to seven important markets, being the most important ones: the EU (34%), the U.S. (22%) and Russia (16%). It’s important to highlight that exports to the EU are based on notices of shipment to ports of arrival and not always the total volume of exports enters the Union, thus, 34 percent of this participation decreases to approximately 20 percent over total exports. The volume that doesn’t enters to the Union is re-exported to the Eastern Europe countries, increasing this markets’ participation in the commercialization of the Ecuadorian fruit.

On the other hand, during the 1999-2001 period a change in the different market composition has been noticed; thus, the U.S. went from 31 percent to 22 percent, Russia went from 6 percent to 16 percent, China went from 4 percent to 3 percent, the Southerner area of the South America region remained in a 10 percent, and the UE went from 16 percent to 20 percent.

GRAPHIC – STRUCTURE OF BANANA EXPORTS

Important markets’ sales grew during the 2000-2001 period, the U.S. increased its purchases in 14 percent, and volumes declared by the UE increased in 10 percent, Russia in 28 percent and Poland in 49 percent. Other markets decreased: China 47 percent, Argentina 8 percent and Chile 4 percent.

Comparing the years 2001 and 1999 data, some markets decreased: U.S. (43%) the EU (6%), China (34%) and Chile (17%). On the other hand, other markets increased their percentages: Russia (154%), Poland (6%) and Argentina (8%).

During last three years the markets’ behavior has been variable, and has determine the internal situation of banana business, distinguished by prices’ crisis during 2000 and recuperating themselves during 2001. It’s important to highlight that the sector’s evolution was adversely affected by climatic problems which reduced the internal supply, resulting in a low purchases percentage to different markets. However, the Eastern Europe markets weight are important and influence the internal situation of the business.

GRAPHIC – BEHAVIOR ON EXPORTS BY MARKETS

4. INTERNATIONAL PRICES

4.1 The U.S. Market

The annual average price of a banana box in the U.S. market improved during the year 2001, quoting an average price of US$ 9.44 among all trade marks; i.e., 42 percent up from the year 2000 records: US$ 6.65, and 53 percent up from 1999. Such favorable behavior remained during all the year’s quarterlies.

4.2 The EU Market

During the last year, the annual average prices of a banana box in the EU market also get recovered, registering an average quotation of US$ 14.81 for main trade marks, 9 percent up from the year 2000, that registered US$ 13.55. However, such quotation didn’t surpass the 1999 records.

Prices (US $) behavior in this market were lower than those shown by marks, an increase of 11 percent, which demonstrates that the mark’s devaluation adversely affected the value of the dollar prices.

4.3 The Eastern Europe Market

During last year this market also get recovered, quoting an annual average of US$ 8.24/box, 17 percent up from the year 2000 records: US$ 7.05 and 1 percent up from the 1999 records.

5. THE EUROPEAN UNION MARKET

In med 2001 the European Union installed the new banana imports regime, resulting in the end of a large dispute inside the WTO caused by the commercialization of the fruit; such regime was based on an agreement among the EU, the US and Ecuador (larger banana producer).

The new regime, which still operates with tariff quotas, import licenses for the dollar area banana and a preferential treatment for banana imports from the ACP countries, is a temporary one, as the agreement establishes that as of January 1^st, 2006 the regime, exclusively based on tariffs, will come into force. During the WTO Ministerial Meeting held in Doha, the member countries enlarged the waive granted by the EU to the ACP countries; at the same time the tariff negotiations procedures were established. This will be the only restriction for banana exports.

The provisional regime in force until the year 2005 benefits Ecuador by fixing in 17 percent the allocation for non-traditional operators (three tariff quotas): 2,200,000 MT, 353,000 MT and 850,000 MT.  Additionally, certain conditions were established for qualifying non-traditional operators, which favors the participation of the Ecuadorian exporting companies. These dispositions will allow a higher access of the Ecuadorian banana to the ACP market, contrary to the regime that established country-quotas.

Ecuador shall be aware of the negotiation that will establish by the tariff in 2006 in order to avoid too restrictive rates and allow a higher access of our fruit to that market.

6. CONCLUSIONS

Banana sales during 2001 were higher than during 2000, taking into account that international quotations were favorable in almost all the markets, which was a positive factor for the producing sector. However, it’s alarming the diminish of an important market like China (an outstanding market in 1997) by selling about 500,000 MT. There is also Philippines, that competes with China, but with larger advantages due to its geographical position; nonetheless, it is important to capture a greater opening of the Chinese market for the Ecuadorian banana.

Menu

Top

        Home