El Niño Threatens Banana Production in Ecuador
Bananas are a critical export product for Ecuador, but global events have severely impacted the industry’s stability.
The onset of the coronavirus pandemic sparked an increase in sea freight rates, coupled with the Russia-Ukraine conflict, which further drove up input prices, particularly for fertilizers.
The convergence of these global events resulted in higher production costs and hampered exports. As the industry struggles to recover from these setbacks, the “El Niño” weather phenomenon is poised to deliver more pain to Ecuadorian growers in the coming months.
Key industry players express concern
The Banana Growers Association of El Oro, a crucial organization in Ecuador’s banana sector, has warned of the possible loss of up to 50,000 hectares of bananas due to flooding triggered by El Niño. To put this into perspective, Ecuador currently cultivates just over 200,000 hectares of these tropical fruits.
A 25% decrease in total production could tremendously impact both exports and the national economy.
Leonidas Estrada, President of the Regional Corporation of Ecuadorian Banana Growers (AGROBAN), emphasizes the urgency of implementing preventive measures to safeguard and improve flood control systems. However, a lack of resources and deteriorating infrastructure leave farmers vulnerable and in a precarious position.
At ProducePay, we understand the importance of having a network of reliable business partners and timely access to capital to cope with adverse weather events. Given the potential impacts of El Niño on banana production in Ecuador, we can help you build a resilient supply chain and offer financing services to help you operate and expand your business.