2024-10-07 18:43:16
The first Ecuadorian products to take advantage of the benefits of the recent trade agreement with China have already arrived in the Asian giant, with bananas at the forefront of these exports. This agreement, which entered into force on May 1, has begun to show its positive effects on bilateral trade between both countries.
Richard Salazar, executive director of the Banana Marketing and Export Association of Ecuador (<a href="http://www.time.news/influence-of-the-commerce-settlement-on-ecuadorian-banana-exports-to-china-2024-06-27-091322/" title="Influence of the commerce settlement on Ecuadorian banana exports to China
– 2024-06-27 09:13:22″>Acorbanec), confirmed that the first shipments of bananas that left Ecuador by sea arrived at Chinese ports between June 5 and 8. The transit time for this cargo from Ecuador to China ranges between 35 and 38 days, depending on the destination ports.
Reduction of Tariffs and Benefits of the Agreement
These first shipments of bananas entered China with the advantage of the trade agreement, which implies a 1% reduction in the tariff applied to Ecuadorian fruit. Before the treaty came into force, the tariff was 10%, now reduced to 9%. The agreement establishes a gradual reduction of 1% annually until reaching 0% tariff by 2033.
Increase in Banana Exports
According to Salazar, banana exports from Ecuador to China have shown a significant increase in the first five months of the year. From January to May, Ecuador exported 5.2 million boxes of bananas to China, representing a cumulative increase of 4% compared to the same period of the previous year. In May, the first month of the agreement, 1 million boxes of bananas were exported, which is equivalent to an increase of 1%.
Salazar indicated that this increase could have been greater if it were not for the recent increase in the spot price of bananas. “China buys the vast majority in the spot market, but said market cannot pay high prices for spot fruit,” he explained. Last week, the spot price fluctuated between $8 and $12 per box of bananas, while this week it stabilized at an average of between $7.5 and $8, when the minimum support price (MSP) per box of bananas for this year is $6.85.
Performance of Traditional Products in the Chinese Market
Bananas have positioned themselves as the second most exported Ecuadorian product to China in the first quarter of 2024, according to the latest report from the Ecuadorian Federation of Exporters (Fedexpor). In this period, banana exports generated $37 million, registering an increase of 13% in foreign currency and 9% in volume. Shrimp remained the main export product, with $653 million in revenue, although with a decrease of 43% in foreign currency and 27% in volume.
Other notable Ecuadorian products in the Chinese market include animal feed ($22 million), wood and manufactured goods ($18 million) and cocoa ($6 million).
This trade agreement promises to continue promoting the growth of Ecuadorian exports to China, benefiting various productive sectors of the country and strengthening bilateral trade relations.