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Despite Record Exports from Ecuador, Banana Prices Continue to Rise on Robust Demand


Despite Record Exports from Ecuador, Banana Prices Continue to Rise on Robust Demand

IndexBox has just published a new report: ‘World – Bananas – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The demand for bananas remained robust amidst the pandemic. Despite record exports from Ecuador, which remains the world’s largest banana supplier, prices in the largest import markets are rising due to strong demand and local COVID-related imbalances in supply chains. Driven by the growing population, the global banana market could reach 143M tonnes by 2030. The increasing epidemic of the TR4 fungus could reduce the growth potential and accelerate the rise in prices.

Key Trends and Insights

Bananas confidently retain their position as the most sought-after fruit in the world. Consumption in 2020 reached 124M tonnes, which is 6% more than the previous year. The increase in demand for bananas in the context of a growing world population will stimulate a market expansion of up to 143M tonnes by 2030.

During the pandemic, demand for bananas remained high in most countries. According to Eurostat, imports to EU countries rose by 5.6% y-o-y in 2020. Banana imports to the U.S. remained at the same level of the previous year (4.7M tonnes), while imports to China fell by 10% to 1.7M tonnes. Despite this, product consumption in China increased by 2.4% amid an increase in domestic production by 3.4% and a decrease in exports by 38.7%.

Strong demand amid supply chain disruptions during a period of tight constraints led to price increases in 2020 that varied from country to country. Bananas have gone up in price most significantly in Russia. In the first quarter of 2021, prices increased by one and a half times more compared to the previous year due to a combination of factors of stable demand within the country, a weakening of the ruble and a local shortage of supplies from Ecuador. The average annual banana price in the EU rose from $0.88 per kg in 2019 to $0.90 per kg in 2020, and in the U.S. it went from $1.14 per kg in 2019 to $1.22 per kg in 2020.

Ecuador remains the world’s largest banana supplier, accounting for 18.4% of the global export market. Despite labor shortages during a period of tight constraints and disruption to supply chains, the country increased banana exports by 7% y-o-y in 2020, driven by increased U.S. shipments and increased production from expanding acreage.

The threat to the global banana market comes not only from the COVID-19 pandemic, but also from the growing epidemic of the TR4 fungus that affects banana plantations. This blight has been known for a long time, but recently, it has been rapidly spreading to new regions. This creates the risk of a banana shortage in the world market and acceleration of rising prices. The market for organic bananas may be particularly affected, as crop protection chemicals are not permitted in their cultivation. In order to solve the problem, new genetically modified varieties and new means of their protection are being developed, which will lead to a restructuring of the value chains in the banana industry.

Global Banana Production

For the fourth year in a row, the global market recorded growth in production of bananas, which increased by 2% to 120M tonnes in 2020. The total output volume increased at an average annual rate of +1.2% from 2012 to 2020. In value terms, banana production rose remarkably to $78.3B in 2020 estimated in export prices.

India (31M tonnes) remains the largest banana producing country worldwide, accounting for 26% of total volume. Moreover, banana production in India exceeded the figures recorded by the second-largest producer, China (12M tonnes), threefold. Indonesia (7.5M tonnes) ranked third in terms of total production with a 6.2% share.

From 2012 to 2020, the average annual rate of growth in terms of volume in India totaled +2.0%. The remaining producing countries recorded the following average annual rates of production growth: China (+0.5% per year) and Indonesia (+2.4% per year).

Global Banana Imports

In 2020, the volume of bananas imported worldwide rose sharply to 23M tonnes, with an increase of 7.1% against 2019. The total import volume increased at an average annual rate of +4.5% over the period from 2012 to 2020. In value terms, banana imports amounted to $15.3B in 2020.

In 2020, the U.S. (4.7M tonnes), distantly followed by China (1.7M tonnes), Russia (1.6M tonnes), Germany (1.3M tonnes) and Japan (1.1M tonnes) were the key importers of bananas, together committing 45% of total imports. The following importers – the Netherlands (1,008K tonnes), the UK (978K tonnes), Italy (782K tonnes), France (700K tonnes), Belgium (676K tonnes), Canada (591K tonnes), Poland (559K tonnes) and Argentina (439K tonnes) – together made up 25% of total imports.

In value terms, the U.S. ($2.5B) constitutes the largest market for imported bananas worldwide, comprising 17% of global imports. The second position in the ranking was occupied by Russia ($1.2B), with a 7.5% share of global imports.

Source: IndexBox Platform

Ecuador and Illicit Trade

Ecuador currently ranks 60th out of 84 countries evaluated for illicit trade prevention or enabling according to the Global Illicit Trade Environment index, serving as a primary location for illicit trade inclusive of tobacco, alcohol, textiles and untaxed market imports.

Illicit trade concerns were the primary focus during a recent conference with Transnational Alliance to Combat Illicit Trade (TRACIT) this week. During the conference, government officials and stakeholders were confronted on the ranking and the current issues within the illicit trade region in an effort for increased regulation.

“The findings are intended to help policy makers better understand the regulatory environment and economic circumstances that enable illicit trade,” TRACIT Director-General Jeffrey Hardy said. “It can help the government take steps to improve Ecuador’s defense against the import of illicit products and to prevent extraction and exploitation of timber, marine and mineral resources.”

Ecuador was presented a set of regulatory recommendations in an effort to combat illicit trade during the conference. Some of the recommendations included:

-Strengthen interagency cooperation at the regional and national level

-Intensify public-private coordination

-Ensure the adoption and full enforcement of anti-money laundering regulations

-Improve public awareness and education on the threat of illicit trade.

“Ecuador already has many important laws in place to address Illicit trade, money laundering and corruption,” Hardy said. “But findings from the Global Illicit Trade Environment Index show that much more attention must be given to enforcement and improved regulation. Ecuador can no longer afford to look the other way on illicit trade.”

Source: TRACIT

Andes Plans International Gold Shipments

Boca Raton, FL – The Andes Gold Corporation, a gold mining and milling company with existing operations in Ecuador and Peru, has said it will begin direct shipping of gold internationally in December.

The Company’s initial shipments will be 10 kgm. of gold (320 troy oz.) per month.

The company said it is anticipated that the direct shipping of gold internationally will increase to 30 kgms of gold (960 troy ozs) per month by May, 2015, in addition to its existing production.

Andes Gold owns two producing mines and one fully operating mill that currently processes about 150 tons of ore per day.

The average head grade of ore being processed is 1.0 oz gold and 15 g of silver per ton of ore.

Andes Gold processes ore from other mines and has reclamation programs on all its projects.

On the Miranda vein, the company has 95,000 oz. of proven reserves. Inferred reserves from the 700 m level on Miranda, Azul, Estrella, Sul and Viscaya veins are 600,000 oz.

The Zaruma-Portovelo district of southern Ecuador is a prolific producer of both gold and silver covering an area of more than 150 square kilometers with at least 15 major veins.

All of these veins are currently covered by only small mining concessions of 10 to 40 hectares in surface area.


US-Sourced LPG Shipments to Latin America Surge


Washington, DC – US shipments of liquefied petroleum gas (LPG) to Latin America have increased five-fold since 2007, edging out more expensive exports from countries such as Saudi Arabia and Algeria.

According to data released by the Energy Information Administration (EIA), Latin America imported about 206,000 barrels per day (bpd) of US-sourced LPG in 2013, up from 38,000 bpd in 2007.

The agency said that the lack of industrial capacity and stagnant natural gas production in Latin America – particularly Venezuela – means there is too little LPG to satisfy voracious demand, while the shale boom in the US has created a growing surplus of LPG, namely propane, butane and isobutane.

US producers are reportedly offering lower prices than other major exporters with buyers in Brazil and Chile signing supply contracts with a number of US providers.

LPG is produced from the natural gas liquids that are processed at fractioning plants to separate methane from other more-valued gases, such as butane and propane.

Total US LPG exports rose 482 percent since 2007 to 332,000 bpd last year. Analysts forecast some 450,000 bpd in exports this year and 800,000 bpd by 2018.

Venezuela, which once exported LPG to neighbors but has suffered production declines, has been importing since 2012 while Ecuador imported 88 percent of its LPG last year, spending $700 million in subsidies, the EIA said.