The banana export sector estimates that 1 million boxes were sent to the Asian giant in May, with 1% less tariff.
The first Ecuadorian products with the benefits of the trade agreement that was signed with China and that came into effect on May 1 have already arrived in the Asian giant, at least in the case of bananas, the second best non-oil export product in the country. Ecuador to all its destinations.
This was confirmed by Richard Salazar, executive director of the Banana Marketing and Export Association of Ecuador (Acorbanec). The bananas that left Ecuador by sea arrived in China between June 5 and 8. He explained that the transit time for this cargo from Ecuador to China is approximately between 35 and 38 days depending on the ports to which they are destined.
These first shipments of bananas entered China with the benefit of the trade agreement. Salazar recalled that this means a 1% reduction in the tariff that Ecuadorian bananas pay to enter the Chinese market, which before the agreement came into force was 10%. %. Now, fruit enters at 9% and the treaty establishes a reduction table of 1% annually until it reaches 0% tariff until 2033.
What has been the effect of the agreement on banana exports?
According to Salazar, preliminary figures for the sector reflect that from January to May Ecuador exported 5.2 million boxes of bananas to China, which represented a cumulative increase of 4% in those five months. If only the figures for May are analyzed, the first month of the agreement, banana exports to the Asian giant were 1 million boxes, which translates into an increase of 1%.
Salazar explains that this slight increase could have been greater, had it not been for the rise in the spot price in recent weeks. “While China buys the vast majority in spot, this market cannot pay high prices in spot fruit,” commented the head of Acorbanec.
That price fluctuated last week between US$ 8 to US$ 12 per box of bananas, while this week it is at an average of between US$ 7.5 to US$ 8, when the minimum support price (MSP) The box of bananas by which the contract signings for this year are governed is US$6.85.
How have bananas and other traditional products fared in China in 2024?
According to the latest official report from the Ecuadorian Federation of Exporters (Fedexpor), which includes figures for the first quarter of 2024 - from January to March -, bananas were ranked as the second most exported Ecuadorian product to China, only behind shrimp. Banana exports generated US$ 37 million in that period with a 13% increase in foreign currency and 9% in volume, while shrimp exports were US$ 653 million, although they registered -43% in foreign currency and -27% in volume.
The other three most exported products from Ecuador to China were animal feed (US$ 22 million), wood and manufactures (US$ 18 million) and cocoa with US$ 6 million.
Apart from bananas, there are other traditional products that already have a presence in the Chinese market and that are also in transit or have already arrived at their ports, indicates Felipe Ribadeneira, president of Fedexpor, such as cocoa and pitahaya. However, he indicated that it is still premature to review increases in these exports.
“The agreement came into effect on May 1. It's not even 45 days yet. There are already shipments that were destined for China that will benefit from the agreement in products that already have entry into that market such as bananas, cocoa, and dragon fruit. It is still premature to review the increases, but we are monitoring the evolution and we will have an analysis later with consolidated figures,” he comments.
On the other hand, there have also been logistical situations that delayed shipments of Ecuadorian products to China, explains Gustavo Cáceres, president of the Ecuadorian-Chinese Chamber of Commerce. “Transit is a little complicated, even due to the costs of the containers, so people are looking for ways to bring them faster, so that has hindered a little what was expected to be dynamic with the trade agreement. Now, the high cost of transportation there with the containers and also the dates... we are just over 40 days away (from the agreement coming into effect).”
