Does the Ecuador banana industry face challenges?

Ecuador is the world’s largest banana export country, accounting for 30% of the global market. It is mainly exported to Russia, the United States, the European Union, Turkey, and China.

However, in recent years, with the “banana war”; many countries have detected polyphagous humpback fly in Ecuador’s food exports; and the rise of the Philippine banana industry. Ecuador’s banana industry is under threat.

The banana industry in Ecuador suffers threaten

The “Banana War” with Latin America

The EU has issued a banana stabilization policy for ACP countries. According to the policy, if the banana exporting country exceeds its “quota” or undermines the stability of the EU banana market, the EU can terminate its preferential treatment.

Although Nicaragua exceeded the quota for imported bananas, it has not been terminated by the European Commission. Over the past decade, the situation of the banana market has changed, and new changes may occur after the pandemic.

The threat of COVID-19 epidemic and TR4

With the pandemic, the overall demand for bananas in cake shops, hotels, and tourism has decreased. Which leads to a fall in banana prices. The exporters are also facing challenges in employee salaries and transportation difficulties.

At the same time, the tropical race 4 (TR4) of Fusarium wilt fungus also poses a certain threat to the production of the banana industry.

Threats from other countries

The experts predict Latin American countries exporting will grow in the next decade. The Philippines has surpassed Colombia and become the second-largest exporter of bananas.

Due to its unique geographic advantages and convenient transportation, the Philippines is bound to have a threaten to Ecuador’s Exports in the Asia region. According to experts’ predictions, under all the same conditions, the Philippines will challenge the position of the king of bananas in Ecuador within two decades.

How to solve this situation

Despite the threat of pandemic and TR4, banana production and prices are declining. The data shows that Ecuador’s banana exports increased by 9% in the first four months of 2020.

The main reason for the increase is the increase in the planted area. In the first four months, bananas were mainly exported to the EU and Russia. From May to June, banana prices have stabilized, in part because of increased local use in Ecuador.

From this situation, Ecuador can increase the consumption of local bananas. Increasing the banana demand for manufacturers is the available method. The fully automated banana processing line can meet the production of a large number of bananas, and it can also reduce labor, to save manufacturer salary expenditure.