Ecuadorian industry asks Government to declare state of emergency

e-mail icon

4 August 2011, Guayaquil

Producers and exporters in Ecuador yesterday asked the Government to declare a six-week state of emergency to combat low prices by enabling credit to ensure growers are paid the legal minimum price of US $5.50 per 43 pound box. This request comes as prices have fallen as low as $2 per box and sanctions have not yet been applied for non-payment of the minimum price.

The industry has also asked the Ministry of Agriculture to find a way of controlling the volume exported, recognising that the low prices are directly linked to an oversupply in the national market. Exporters estimate that supply needs to be reduced by at least a million boxes a week in order to bring prices back up.

Growers' organisations who met in Guayaquil signed a letter to the Govenrment, backed by exporters, which proposes that they are paid $3 for every regime that is covered by a contract but which is not exported.

Prices in the EU market, for example, have fallen from around $12 a box to $8. The industry attributes this to the financial crisis in Southern Europe, high temperatures, conflict in the Middle East and the holiday season in Europe.

Eduardo Ledesma, Director of exporters' association AEBE told the press that “exports must be reduced so that prices recover. If there is no consensus between the different palyers then we won't be able to resolve this crisis."  It has also been proposed that the Government explore the possibility of shipping bananas as food aid to famine-stricken parts of Africa.

Source: El Comercio, 4th August 2011