The Philippines was the main supplier of bananas to the Asian country, but its production plummeted due to problems in its plantations with fusarium and Sigatoka.
Ecuadorian bananas are entering South Korea with force, where from January to May their shipments almost tripled with an unprecedented growth of 276%.
The Asian country went from purchasing 532,000 boxes of the fruit in the first five months of 2023 to a little more than 2 million boxes in the same period this year, according to the latest figures from the Banana Marketing and Export Association of Ecuador. (Acorbanec).
Exports to South Korea are part of the 160.45 million boxes of bananas that Ecuador exported in that period to all its destinations, which, however, represented a drop of 1.46%.
According to Richard Salazar, executive director of Acorbanec, the growth of exports to that Asian country is due to the production cut in the Philippines, its main supplier, which has serious problems with Fusarium race 4 (Foc R4T) and Sigatoka in their plantations.
“The Philippines has been having problems in its production and is neglecting this market (South Korea), and Ecuador is serving this country even more with greater shipments of bananas.”
The Philippines has been living with Fusarium race 4 for more than a decade, which decimates its crops year after year. According to the International Regional Organization for Agricultural Health (Oirsa), the disease had been reported in that country since the 1970s, but in 2008 the presence of Foc TR4 was confirmed.
The head of Acorbanec projects that the growth of Ecuadorian bananas in the South Korean market will be maintained in the long term by ensuring that the situation in the Philippines is unsustainable and that that country will continue to reduce its production.
Salazar highlights that this growth in exports and the positive projections with South Korea occur despite the fact that Ecuadorian fruit currently pays a 30% tariff to enter that market.
For this reason, he believes that the possibilities of growing more are real, since in 2025 the trade agreement between Ecuador and South Korea would come into force, which is still awaiting final signature, scheduled for the second half of 2024.
That agreement had a pre-signature in October 2023 in Seoul. Once the treaty, called SECA by its acronym in English (Strategic Economic Cooperation Agreement), comes into force, the Ecuadorian banana tariff will drop 6% annually until it reaches 0% tariff in five years, that is, in 2030.
ALGERIA AND THE UNITED STATES ALSO DEMAND MORE ECUADORIAN BANANA
South Korea is not the only market that has shown interesting growth in the preference for Ecuadorian bananas so far this year. Salazar also highlights shipments to Algeria, which from January to May grew 65%, which translates into 2.8 million more boxes.
According to Acorbanec, the African country went from purchasing 4.4 million boxes in the first five months of 2023 to 7.3 million this year, placing that country as the sixth most important destination for Ecuadorian fruit exports, behind from Russia, the United States, the Netherlands, Italy and Germany.
“In the case of Algeria, the increase is due to the high demand in that market and the open licenses to import bananas,” Salazar specifies.
The United States also grew 30% in shipments in these five months, an additional 10% from what was shown from January to April. This is the second best destination for the fruit with 19.2 million boxes exported.
Salazar explains that the increase in the US is due to the production problems that Colombia and Central America have that affected them in March, April and May, which benefited Ecuador, since in those months the transnationals bought more national bananas to meet their contractual commitments in the US and the European Union.
“They came to buy more bananas in Ecuador, which is why if we analyze exports to the US they have increased by 30%, in the case of the European Union a reduction in exports in January of 16.42%, In the accumulated to May it was reduced by 2.18%, that is, the shipping deficit was reduced, more bananas were exported.”
ECUADOR ALSO SUFFERS PRODUCTION PROBLEM
However, in the accumulated total Ecuador exported -1.46% compared to 2023. Salazar assures that it is due to a drop in production due to climatic factors ranging from excess water stress to high temperatures.
“Despite having higher cases in 2024 compared to 2023, the number of boxes of bananas per bunch fell from 1.5 to 1.4 boxes. For each bunch it fell on average to 1.2 to 1 this year, therefore, production fell.”
In addition, important markets such as Russia and China cut their demand for bananas. In the case of Russia, it reduced its purchase by 17.72% and has not bought this difference from any other market. The drop in volume is attributed above all to the high price of the fruit. This market buys mostly at the spot price. which remains at an average of US$ 8.29 per box, much higher than the minimum support price that for 2024 was set at US$ 6.85.
A similar situation occurs with the Chinese market, which is experiencing a slowdown in its economy and which also demands the majority of Ecuadorian bananas at spot prices. From January to May, China bought 343,000 fewer boxes, which represented a drop of 6.18% compared to the same period in 2023. “The spot price this year has been very high and they are not willing to pay a lot for the fruit. Mostly only contracts are being sold now,” explains Salazar.
