The Ecuadorean government has reportedly declared for the third time in almost a year a state of emergency for the South American country’s banana industry.
Some US$5m in assistance has been pledged to help alleviate the situation given that exports have fallen 16 per cent in the first five months of 2012, according to reports by El Comercio.
The emergency period will last for eight weeks in an attempt to support small producers who are receiving prices of less than US$2 per box of bananas (the official price is US$5.50), according to Ecuador’s Agriculture Minister Javier Ponce.
The US$5m will apparently go towards fumigating the plantations of small producers who represent 85-90 per cent of Ecuador’s banana production, Ponce said.
The government will also use the money to buy bananas from those producers who have unfulfilled contracts to sell their fruit, El Comercio reported.
Over the weekend, Ecuadorean President Rafael Correa announced that the government will create a banana export company to sell the fruit and avoid what he described as the “exploitation of small producers”.
According to figures from the Ecuadorean Banana Exporters Association (AEBE), national exports have been in decline since January, with weekly shipments down by around 780,000 boxes in the first five months of the year, El Comercio reported.
During May 2012, sendings totalled 22.5m boxes, compared with 25.2m boxes in May 2011.
Since June, AEBE said the weekly shortfall has reduced to 500,000 boxes but it claims exports are still under 4m boxes per week, while volume is usually around 4.5m boxes/week at this point of the year.
AEBE attributes the decline to a fall in demand for fruit on the Northern Hemisphere market, coupled with the financial crisis in some European countries and low banana productivity in Ecuador as a result of a severe winter which has resulted in a lower export offer.
