Effects of COVID-19 on agribusiness in Ecuador
Here is an update of the most relevant developments so far in Ecuador related to COVID-19 during March and April and the effects on the agricultural sector. Read more about the impact it has on the non-oil exports, fresh cut flowers, banana exports and the input for egg producers.
Although no official figures are available yet, the government estimates a USD 350 million loss just in the trade sector, and a similar figure for the industrial sector. These are early estimates that are likely to increase as Ecuador considers extending the lockdown beyond April 14th.
An extended lockdown has considerably slowed-down the economy and imposed severe losses to some key export sectors. According to the Ministry of Production and Trade, at least 70% of the productive sectors have totally halted their activity, while the remaining 30% have been granted work flexibility in order to continue operating (agri-businesses, exporting companies, supermarkets and pharmacies).
Non-oil exports in Ecuador remain in the midst of the crisis
Despite the reduction in orders in April, Ecuadorian non-oil exports remain. The main items that are exported are bananas and shrimp, at the beginning of the covid19 crisis these sectors managed to put their products on international markets, although in April it was a bit complicated and there has been a reduction in some products, but these are the ones that have more output.
Tuna and canned foods have also been in demand, especially in Europe due to the fact that there is a shortage of the product there, as well as cocoa, despite the international drop in prices, the export volume remains.
Fresh cut flowers
The flower market remained stable during January and the first days of March, with the health emergency the flower market collapsed, as of May some shipments have been made for Mother's Day but still the sector operates at 10% or 20% capacity.
Flower exports are between 60 and 70 million dollars per month under normal conditions, but now between the second half of March and the first of April, they would have decreased to around 10 million dollars.
Ecuadorian banana exports increase in the first quarter
During the first quarter of 2020, banana exports from Ecuador grew 9.92% compared to the same period in 2019, a total of 104,731,409 boxes were shipped according to figures provided by the Association of Banana Exporters of Ecuador.
The fastest growing destination for banana exports was the Middle East, with an increase of 30.04%. Turkey, meanwhile, saw a 50% increase in its banana imports in February.
In the European Union during 2020 the ships of the fruit increased by 13.23%, shipments corresponded to almost 5 million boxes.
On the other hand, the United States and China decreased their purchases by 5.51% and 6%. This drop is estimated to be a consequence of the effects of the coronavirus in both countries.
Concern in egg producers for input imports
The micronutrients are fundamental elements for the nutrition on poultry that help to avoid diseases. The import of this raw material worries the Association of Egg Producers of Ecuador, the producers are currently working with the stock that the suppliers had before the pandemic since imports are taking longer than expected, they hope there is no shortage of this raw material.
One of the great producers of this type of raw material is China, the delays are now beginning to have an impact on Ecuador. An increase in prices is expected when imports of these micronutrients resume in the country.
There have also been delays in other inputs such as soy and corn but the corn harvest begins in April, the country must wait to know how many tons will be collected in the warehouses.