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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Ecuador: The increase in banana cargo tariffs will be progressive

Friday, May 05, 2017 > 10:26:05
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Fresh Plaza

The increase in tariffs for cargo services in Puerto Bolivar, El Oro, will be charged progressively. The concessionaire, Yilport, released a new listing among its customers, which will begin to take effect as of this month. According to this listing, prices will start increasing from USD$ 0.13 to USD$ 0.24 per box, and continue increasing until September, when they amount to USD 0.28.

The new tariff surprised marketers and exporters of fruit who had reached an agreement with the authorities on March 8 and hoped that this increase would not take place.

They were informed of this new decision at the meeting they had with Yilport authorities last Wednesday. Richard Salazar, the Administrator of the Banana Marketing and Export Association (ACORBANEC) stated that: "According to them, the resolution is approved, but to date it has not been socialized." He also said that he was waiting for some statement from the Port Authority. "If there is no resolution yet, they should not charge beyond what is in effect. If there is such an increase, we will challenge it."

According to the Association of Banana Exporters of Ecuador (AEBE), this increase in fees would directly affect the sector's competitiveness, as 25% of banana exports leave the country through this port. An average of 1,500,000 banana boxes are shipped per week. If tariffs are increased, the sector would pay an additional USD $165,000 a week this month. By September, when the increase reached USD $ 0.28, the payment would amount to USD $ 225,000.

Eduardo Ledesma, the president of AEBE, said that this provision had been dictated at a time when the sector is still seeking to regain its market share in the European Union. According to him, they lost 10% of that market in two years because of high tariffs.

Richard Salazar and Eduardo Ledesma are hoping that the new government takes the position that the Minister of Agriculture, Javier Ponce, and the Foreign Trade Minister, Juan Carlos Cassinelli, took in March, when they said this increase shouldn't take place.

On the other hand, the entry into force of the trade agreement between Ecuador and the European Union has restored calm to banana producers and exporters. Thanks to the tariff advantages, this sector has managed to recover, in the first three months of the year, 5% of the 10% market share it had lost in two years.

The lack of a trade agreement with this bloc meant that the sector had to pay much higher tariffs than its competitors. This made their bananas more expensive and less attractive to certain buyers.

According to the AEBE, Germany is the market that has become more dynamic and others have emerged, such as Belgium, which have shown an interest in the Ecuadorian fruit for the first time. According to the Ministry of Foreign Trade, in January alone, banana sales (including organic) increased to USD $ 100 million, compared to USD $ 72 million in January last year. With the agreement, the fruit pays 97 euro per ton, without it producers would pay 122 euro.


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