UNIQUE SELLING POINT

Ecuador 2019 | AGRICULTURE | INTERVIEW

The Ecuadorian banana is renowned for its flavor and shelf life, and AEBE is uniquely positioned as it represents 70% of Ecuador's banana exports.

Eduardo Ledesma García
BIOGRAPHY
Eduardo Ledesma Garcia is the Executive Director of AEBE since 2003 and has contributed significantly to the growth and scope of the organization. Prior to AEBE, he served as the Executive Director of Proexant since 1991, an organization designed to promote the export of traditional products. He graduated with a degree in political science and started his career in the banking industry.

What are the main activities of your association in support of the banana industry?

The association was founded 20 years ago and initially started as a cooperation of five companies. At present, we have 57 companies that represent almost 70% of Ecuador's banana exports. We function as the contact point between the ministries of agriculture, labor, environment, and health, the IRS, the local governments of the various regions with banana plantations, banana producers, and all other companies in the supply chain. We work with the Ministry of Foreign Trade to promote more FTAs with other countries, so that our bananas can be exported under the same tariffs as our competitors. So far, we only have an FTA with the EU after many years of negotiations but in 2020, we will have the same tariffs as Colombia, Peru, and Central American exporters. Hopefully, that will help us capture 40% of the market share in Europe. In the US, we also have zero tariffs, though unfortunately, we are losing that market because Mexico and Guatemala produce at 15% lower costs and are geographically closer. The Ecuadorian banana is the most expensive in the region, though it is still the most desirable in the world for three reasons: flavor, shelf life, and quality.

You represent both independent exporters and those that produce for international companies. What is the balance?

Back when we had five companies, Bananera Noboa had a market share of more than 50%, and the other associates had the rest. That has changed significantly, and today we have around 200 exporting companies. Part of the reason for this growth is the containerization of the supply chain, making it easier for producers to become exporters. Many large supermarket chains buy directly from producers because they have traceability, certifications, certainty that they will not fail with the product, the knowledge, and the quality. This way, supermarkets avoid intermediaries and buy directly. In Colombia and Costa Rica, all producers come out with a yearly price and contract, but unfortunately, we do not have that level of formality in Ecuador yet. As an association, we make our information available to all players. We do not work according to particular interests but trade interests; we do not participate in politics and do not intend to do so.

Exports in the banana market grow around 8% per year and in 2017, it grew by 400% in Africa. What are the reasons behind this growth?

Our main market as a block is the EU, and Russia, as a country. Russia is our largest buyer and takes around 25% of our national export. Ecuadorian bananas last seven days longer on hangers compared to other bananas, which is an advantage for both supermarkets and consumers. However, we want to further boost the European market, since we only reach eight out of 28 EU countries. Within the EU, the largest buyers are Germany and Italy, and they distribute the product; however, we want to directly reach other countries in the region. We also want a greater presence in the GCC, in countries such as Qatar and the UAE, and Asia. We will enter the region through Turkey, which is why we are pursuing a trade agreement with Turkey. We want a greater global participation, though we should improve our domestic productivity and our international supply chain to get there.

How do you envision further product diversification in the banana industry?

In our national production, we have baby bananas, organic bananas, purple bananas, conventional bananas, and plantain. All are perfectly compatible, and that range of different products is generated from the same plant. The current challenge is to brand these new products to the world; we need a R&D department in the future so that our new banana varieties are more productive, consumable, and sustainable for the market.