The free trade agreement between China and Ecuador, signed in May of last year with the aim of eliminating import tariffs for Ecuadorian fruit, particularly bananas, is still awaiting national approval in Ecuador. Following a political crisis that stalled the ratification of the agreement, the Constitutional Court eventually validated the document, and it is now being debated in the National Assembly. Disagreement among the assembly members resulted in a temporary suspension of the debate on Jan. 11, and the process has not yet been resumed as of the time of writing.
Meanwhile, the Ecuadorian banana industry remains optimistic about the approval of the FTA and is placing its expectations on the deadline of June 2024 set for ratification of the agreement.
Jose Antonio Hidalgo, executive director of the Ecuadorian Banana Exporters Association, has claimed that the agreement will enable the sector to double its shipments to China and reverse the decline observed during the COVID-19 years. According to Hidalgo, Ecuador exported $156.62 million worth of bananas to China in 2020, a 29% decrease from 2019. He added that the industry had been unable to grow its presence in the Chinese market owing to the high tariffs that remain in place.
At the same time, Ecuadorian banana exports to China appear to be picking up. Statistics released by Ecuador’s Banana Marketing and Export Association for the first 11 months of last year show an increase in shipments to the Chinese market. The reported growth in export volume stands at a remarkable 45% compared with the same period of 2022. From January to November 2023, China received nearly 256,510 metric tons of Ecuadorian bananas, making it Ecuador’s largest market in East Asia, followed by Japan with 87,247 metric tons. In total, Ecuador exported 5.9 million metric tons of bananas over the data period.
China traditionally relies on the Philippines, Vietnam and Cambodia as its major banana suppliers. One of the main advantages of all three is their geographical proximity to China, which results in a relatively short transit time. In terms of production, however, these countries have recently encountered a number of difficulties. The Philippines is struggling to deal with outbreaks of the fungal disease Fusarium wilt, which have severely impacted yields and exports. Meanwhile, Cambodia is suffering from the effects of climate change, including water shortages at banana plantations and pest problems. Vietnam’s banana exports to China were on the rise in 2023, but in July the sector received a warning from Chinese regulators for failing to comply with phytosanitary standards, which it had to address.
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