The proportion of European dollar banana imports now subject to a preferential Customs regime is up to 98 %!
On 1 January, Ecuador joined the signatories of the association agreements or trade agreements long since signed by all the big and small dollar suppliers (Colombia, Costa Rica, Guatemala, Honduras, Nicaragua, Panama, Peru and El Salvador). For the older signatories, the duty went from 103 to 96 euros/t (1.75 euro/box). In the case of Ecuador, there was a much greater reduction, with duty plummeting by 30 euros at a stroke, down to 97 euros/t. This makes for a substantial gain per box, of 0.55 euros. Ecuadorian producers believed that they could take advantage of this tax relief by increasing the minimum price. Yet they did not count on the pugnacity of their exporters. Ultimately, the producers clawed back less than 0.11 euros. Yet of more concern is the spread of this customs advantage to the entire import industry, which for 2017 will result in a generalised fall in contract prices, especially the leading one: the Aldi price. According to some leaks, it could actually drop by more than one euro per box between 2016 and 2017, to below 13 euros per box. Not all of this all should be attributed to the purchase price reduction by the German supermarket sector, since other factors contribute to this downward trend, especially the world increase in production potential. To return to European Customs duty, the next step is set for 2020, when it will go down to 75 euros/t. There should be no doubt that in the meantime, another negotiation will already have started between the Europeans and dollar suppliers, aimed at cutting duty further. Yet that is another story.
Source: CIRAD
Click "Continue" to continue shopping or "See your basket" to complete the order.
