The bananas produced in Ecuador have proven a firm favourite across the world. And despite trade barriers put up by the banana tariff, and rival South American exports on the supermarket shelf, Ecuador is still the top banana exporter in the world.
Ecuadorian bananas are available all year round - and the high season, which stretches from January to April, coincides with peak consumer demand.
The high quality of Ecuadorian product satisfies the requirements of the international market, according to Vincente Wong, president of Ecuadorian banana exporter Reybanpac. “Ecuador has natural conditions which puts its banana production ahead of the market,” he claims. “The high production period from January to April matches the peak in demand, and this is a perfect supply balance. Colombia and Costa Rica have it the other way round, and this makes Ecuadorian bananas the first choice.”
Ricardo Mejía Alcivar, production manager at a Reybanpac plantation in the so-called ‘Banana Republic’ Rio Palenque, says the Ecuadorian volcanic soil in the area makes for high-quality fruit. “This area does not see much light each day, and this is not ideal for banana production,” he says. “But the quality of the soil here compensates for this. The light volcanic soil is rich in minerals and vitamins, and easy to irrigate.
Reybanpac, the top producer and third-highest exporter of bananas in Ecuador, owns 8,000 hectares of bananas, and makes up six per cent of all Ecuadorian banana production. The Rio Palenque plantation, which is made up of two separate farms spread across 320ha, produces an average of 42lb cartons, per ha per year.
But the banana tariff has put up trade barriers for Ecuadorian exporters, according to María Antonieta Reyes, banana and organics co-ordinator at the Export and Investment Promotion Corporation (CORPEI). “The banana tariff adds $8-10 to each box, which has to be paid by the importer, and this is holding us back,” she says.
Wong agrees that the banana business is tough. “The banana trade is very complicated, and, like the majority of Ecuadorian producers, this has led us to diversify.” Other Reybanpac products include pineapples, palm and its oil, and macadamia nuts.
“Banana prices are very low at the moment at $1 (53p) a carton and we are not covering costs,” says Mejía Alcivar. “But the average price in the high season is $3.50 (£1.87) a box, and this is when we can recuperate. The prices from January to May were around $7 (£3.74) a box this year after hurricanes in Costa Rica.”
Banana exports generated $1,100 million for the Ecuadorian economy in 2005, making up 50 per cent of agricultural gross domestic product (GDP) and 3.84 per cent of the total GDP, according to the Ministry of Agriculture. The sector employs 12 per cent of the total population.
Ecuador hosts 150,000ha of banana plantations, divided between 6,216 producers, says the ministry of agriculture. The main banana provinces are Los Rios, El Oro and Guayas.
The banana export industry is worth $1 billion (£535m), according to Reyes. “Now we must make the most of Ecuador’s part in this market by finding new products and adding value,” she says.
But the majority of Ecuadorian banana plantations are operated on a small scale. A total of 4,416 producers grow 0.01-20ha, 903 plantations measure 20.1-40ha, and 384 companies farm 40.1-60ha, according to the ministry of agriculture. The remaining producers, which operate on plantations measuring 60.1ha and beyond, are the minority.
The main varieties grown in Ecuador are Valery, Grand, Cavendish, Grand Naine, and Lacatan. Other varieties include El Oritos, or baby bananas, plantains including Barraganete and Dominico, and red banana.
Reyes says Ecuadorian growers use half the amount of chemicals used in other countries because of the weather conditions and volcanic soil - and Ecuador also grows 16,000ha of organic-certified bananas.
A total of 1,000ha of Ecuadorian banana plantations produce Fairtrade-certified product. “This is a great opportunity for small producers in rural areas, and co-operatives, who are paid a premium for their product which they can put into a pot for reinvestment,” says Reyes.
The main export market for Ecuadorian bananas is Europe, which imports 34 per cent of the available product, while 28 per cent is supplied to Eastern Europe and 21 per cent is sent to the US. Other markets include Middle Eastern countries, South Africa, and Asia.
Ecuadorian banana exports to the UK this year reached 1,048 tonnes in May, according to the Central Bank of Ecuador. But the majority of Ecuadorian banana exporters find it difficult to enter the UK market, says Wong. “UK retailers look for high standards and, at the same time, they want to fix a price all year round, and this makes it difficult for Ecuadorian growers, and other producers, to supply to the market,” he says.
Wong adds that the involvement of supermarkets with suppliers in the UK contributes to the difficulties met by Ecuadorian producers. “UK retailers are very strong at the moment, and their power is increasing,” he says. “They want to manage everything, to be involved in many aspects of production and supply, and that is not always possible.”
Reybanpac is preparing to enter the UK market by obtaining certifications including EurepGAP, Rainforest Alliance, ISO 9002 and 14001.
Wong says producers must pack for supermarket brands as a way into the UK market. “To be noticed we must add value by developing new products and finding new ways to manufacture products,” he adds. “But a banana is a banana, and adding value is not easy. This is why we have concentrated on gaining certifications to find a quality niche.”
The time it takes for product to reach its destination and high transport costs pose major obstacles for Ecuadorian producers exporting to Europe, according to Mejía Alcivar. He says shipping product from Ecuador to Europe can take up to 36 days in total - 21 days to a European base and a further 15 days to distribute product. “The bananas are colour-coded with bands so that we can monitor how old the fruit is and when it should be picked,” he says. “Bananas have to be under-ripe when they are transported, but the size and ripeness depend on how long the journey is to its destination.”
With no direct shipping route from Ecuador to the UK, the bananas must go through Germany or the Netherlands, and this adds to costs, according to Reyes.
Wong says that improving logistics would encourage Ecuadorian exporters to ship to the UK. “The transport infrastructure has been the same for the last 10 years, but production has grown, and now the transport system has to be improved to support the industry,” he says.
Additional costs are racked up by the manpower needed to grow high-quality bananas, adds Wong. “Banana production is very labour intensive, and one person per ha is needed in each plantation,” he says.
Reyes says the size of Ecuadorian bananas is another factor that has prevented the product from penetrating the UK market. With big bananas measuring 10.5 inches, medium product at 10 inches and small fruit at 8-9 inches, Ecuadorian product is substantial. “The majority of European countries tend to like big bananas, particularly Germany,” says Mejía Alcivar. “But the UK wants small bananas, and this has caused us some difficulties.”
CORPEI has looked into promoting the baby banana produced in Ecuador, El Orito, meaning ‘little gold’, in the UK - although it does not travel well and airfreight costs are high. “We are trying to put forward El Orito bananas as part of the Fruit for Schools scheme in the UK,” says Reyes. The Bonita brand is attempting to negotiate a Fruit for Schools contract with the UK government, although the high transport costs make it difficult to offer competitive prices, she adds.
Reyes believes the size barrier can be overcome by educating UK consumers and sharing ideas on how to eat bananas as part of a recipe, as well as on their own.
Ecuadorian producers must compete with rival South American banana exporters for a share of the European market, according to Wong. “Brazil is an upcoming threat to Ecuadorian exports as they grow a lot of bananas which can be shipped to Europe in six days,” he says. “But they are short on water, and there will be times when this makes production difficult.”
Ecuadorian bananas can stand up to competition from Costa Rica and Colombia on UK supermarket shelves - but they need a promotional push, according to Reyes. “UK marketing is important because this is where we have a lot of competitors,” she says. “But this is not always about lowering prices. The most important thing is differentiating the bananas that we offer.”
The Ecuadorian Association of Banana Producers visited London with CORPEI in February to take the first steps to start up a promotional push for Ecuadorian product.
UK supermarket supplier Mack Multiples visited Ecuadorian producers in June, with CORPEI, and has since received its first shipment of conventional bananas, says Reyes. “But we are still in the process of completing the deal with them,” she adds. “Working with experienced importers will also help us to learn more about the banana market in the UK.”
CORPEI is also starting a promotion with French-based supermarket Carrefour in November, which includes in-store banana tasting across stores in France. “People don’t necessarily know what to do with bananas when they see them on the shelf,” says Reyes. “This kind of promotion is aimed at raising awareness about bananas, educating consumers about where they come from and what difference this makes, and encouraging people to eat more bananas and experiment with ways to fit them into their diet.”
The export promoter is looking for a similar deal in the UK. “This will help us to expand our export opportunities,” says Reyes.
CORPEI undertook an awareness campaign for Ecuadorian products, including bananas, in Europe throughout the World Cup. And the organisation is in the first stages of launching a country-specific campaign for Ecuadorian bananas, similar to previous successes such as Columbian coffee or Cuban cigars, in order to make consumers associate Ecuador with bananas. “The problem is that a lot of people in Europe do not know where bananas come from, they have no idea as to the country of origin,” says Reyes. “The only way that we can encourage loyalty of Ecuadorian product is to put more emphasis on provenance. And the most important thing we can do is distinguish Ecuadorian bananas from the other product on the shelf.”
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