PRODUCT: Banana
ECUADOR, MEXICO AND CHINA
Country evaluation and Selection
INTRODUCCION
The objective of this research carried out between the countries of Ecuador, Mexico and China,
will determine which is the best country to produce the banana and which is the best country
to sell, taking into account the following factors, such as climate, geography, and economic
models to undertake an efficient and productive industry in such a way that they become
competitive in a global market and enrich in all areas and improve the quality of life in their
country.
Choosing Marketing and Production Sites, and Geographic Strategy
ECUADOR.- Bananas are produced in the provinces of Manabí, Los Ríos, Guayas, El Oro,
and Esmeraldas. In 2015, the production of banana boxes per hectare increased by 5%
compared to the previous year. This was due to the fact that the average spot price improved
during the year, although the official price was lower. This increase allowed to finance
infrastructure, fertilization, and better control of Sigatoka control, a disease that affects
productivity and availability of exportable fruit.
The banana sector, according to MAGAP data, generates around 2 to 2.5 million direct and
indirect jobs, with an average of direct employment of 0.8 men per hectare of banana;
The varieties that Ecuador offers include: Cavendish, orito or baby banana, and red banana.
The harvested area of banana is estimated at some 214,000 ha, mostly in technified plantations
and with certifications of international quality standards such as ISO, HACCP (Hazard
Analysis and Critical Control Point), Rainforest Alliance and GLOBALGAP.
PIB de la producción de banano, café y cacao (USD millones)
MEXICO.- It is important to mention that in Mexico eight varieties of this fruit are produced,
among which is the giant dwarf banana, the male banana, the apple tree banana, the purple
banana, the pear banana, the banana tabasco and the banana valery, being the giant dwarf
banana the most important with a cultivated area of 28 thousand hectares followed by the male
banana with 18 thousand hectares.
In the country banana production is concentrated in the coastal areas of the Gulf of Mexico and
the Pacific, mainly in the states of Chiapas, Veracruz, Tabasco, Nayarit and Colima with an
annual production of 1.8 million tons equivalent to 79 percent of the total national production
and 78 percent of the harvested area.
Throughout the territory, little more than two million tons of bananas are produced annually,
of which 95 percent are destined for national consumption and the rest to exports where the
United States is one of the main consumers of this Mexican product.
It should be noted that banana production in the country is an important source of employment,
since each year generates an approximate of 100 thousand direct jobs in the field and about 150
thousand indirect jobs.
CHINA:- It produces in quantity only to consume in the territory but because of typhoons,
which have greatly affected several regions such as Canton and Hainan, where the majority of
local Chinese bananas are produced, the price of local fruit has increased quickly. This has
made imported bananas more favorable for Chinese consumers since the price of local bananas
has been reaching its maximum point since March, as a result of adverse weather conditions.
In addition, the production of Philippine bananas, one of the bananas most imported from
China, has been affected by typhoons as well.
Ecuador increases the export of Banana to China in 2016
"Since the 90s, when Ecuadorian bananas were allowed to be imported into China, the volume
has not stopped growing, among all varieties, Baby Banana is the most demanded by Chinese
consumers because of its beautiful shape, its pleasant sweetness, its long service life and its
good quality "
"According to the latest data from the Trade Promotion Council, in 2015 the total export of
Baby Banana from Ecuador was 1,687.58 tons, and the amount doubled in 2016 when it
reached 2,240.57 tons until April of this year (2017) , the export has reached 779.99 tons.The
total export has shown a growing trend over the years and prices have been rising steadily.”
CLIMATE
ECUADOR
Geographical location of the banana sector in Ecuador
The favorable climatic conditions offered by Ecuador allow small, medium and large
producers to affect the global demand of bananas 365 days a year.
The main provinces of Ecuador, where banana is grown, are: Guayas, El Oro and Los Ríos.
Positive aspects of climate
Ø Ecuador has tropical areas.
Ø The average temperature is 27°C.
Ø Wet areas where the banana is growing rapidly.
Ø Its production is given throughout the year.
Negative aspects of climate
Ø Prolonged climates in the areas of cultivation
Ø Fall of volcanic ash.
Ø The El Niño phenomenon.
Ø Climate change causes the modification of the gases of the atmosphere, in particular
greenhouse gas emissions, which infected favors the growth of fungi and insects.
COMPETITION
Unique feature of the Ecuadorian product
Ecuador is the first banana exporter in the world due to its special soil and climate
characteristics; this is why Ecuadorian bananas are recognized for their quality and flavor in
the international markets of Europe, Asia and North America.
The evolution of production and export is described by the comparative advantages granted by
the excellent climate and property of the land, lower incidence of pests and disease, the road
and port construction at the national level, the good quality of the Ecuadorian product and the
prices of the market that have occurred, in relation to that of the Central American countries.
The geographic position of Ecuador and the qualities of the terrain, grants to the plantations the
privilege of using only half of the cycles in the fungicides, in comparison to those used by the
other banana producing countries.
MEXICO:- The climate in Mexico is greatly influenced by its geographical position. Being
traversed almost in the middle by the parallel called Tropic of cancer, it leaves the southern
half of the national territory within a tropical climatic zone and to the north within a subtropical
climatic zone.
The zones that better vocation for the crop are located in the humid tropic and the subhumid
tropic with good water availability.
Positive aspects of climate
Ø Production throughout the year.
Ø Its production is concentrated in the tropics.
Ø Has a significant amount of rain throughout the year.
Ø The average temperature is 25.4°C.
Ø The average rainfall is approximately 2134 mm.
Negative aspects of climate
Ø Reduction of the temperature of rains.
Ø High temperatures that increase droughts and prolongation of pests.
Ø Increasing concentrations of greenhouse gases.
CHINA:- The predominant climate in China is humid subtropical, characterized by warm and
humid summers and cool winters. However, due to the immense size of the country, there are
variations and three major thermal regions can be distinguished:
Monsoon zone of the east. It covers almost half of the national territory and is characterized
by a humid and semi-humid climate. In this area, most of the country's arable land is found.
Dry area of the northwest. It is characterized by a dry climate associated with a dry
landscape. It covers around 30% of the national territory.
Icy zone of the Qinghai-Tibet plateau. In this area, cold climates and mountainous areas are
combined. Corresponds to a quarter of national territory.
BOARDING
ECUADOR:- The Ecuadorian Banana requires 35 days to reach the port of Shanghai, while
the banana of the Philippines only requires from 3 to 5 days the same as a major supplier for
that country. In addition, Ecuador must pay 10% in tariffs to enter the Chinese market, in
addition to a tax to cross the Panama Canal, while its Asian competitor is exempt from taxes.
MEXICO:- Mexican banana producers regret that they have not been able to complete the
export project to China due to the strengthening of sanitary protocols.
He explained that it is a protocol (sanitary review) that is made every year to the product, since
almost 30 percent of banana production in the states of Jalisco, Colima and Michoacán, is
exported to North America, Europe and Asia, but exports to China continue to be suspended,
which is a huge market due to population density.
OPPORTUNITIES
ECUADOR:- Ecuador remains the main exporter of bananas in the world, 30% of the world's
banana supply comes from Ecuador, representing 15% of total exports and is the second largest
export of the country given the demand of consumers of the most demanding markets, and the
fact of being part of the daily diet of millions of people. The export of Ecuadorian bananas has
had a constant growth in the last 3 years because the producers have increased their productivity
per hectare, that is, more boxes per hectare produced.
Why sell to China
The motivation that shows us in the Chinese market for the amount of people in this country
and its rapid economic growth.
The Chinese market is so big, that it can accept our product in important volumes. The idea is
to increase the banana trade to this country, which is accompanied by the last year and I think
that we can win more and more
The distance between Ecuador and China is not a major problem for this crop, and in fact in
recent years has been exporting regularly to this Asian market.
China chooses a country that is already in the country in export and export of bananas, and also
the only country in the world that produces bananas all year, so that the price of the offer is
guaranteed. In addition, its unique location and climate offer ideal conditions for growing
bananas. Due to the fact that banana exports are one of the main companies in the country, the
local government offers support policies and legal protection. Finally, the large plantations
available guarantee the best possible quality of life.
MEXICO:- Banana production "Made in Mexico" increased seven percent during 2016,
compared to the same close of the previous year, to register an estimated volume of two million
419 thousand tons, informed the Ministry of Agriculture, Livestock, Rural Development,
Fisheries and Food (SAGARPA), which directly benefited the producers.
According to preliminary statistics from the Agrifood and Fisheries Information Service
(SIAP), from 2013 to 2016, banana production in the country grew by 270 thousand tons, which
represents an increase of 12.9 percent in four years.
The babano "Made in Mexico", is produced in 16 entities of the country, Campeche, Colima,
Chiapas, Guerrero, Hidalgo, Jalisco, State of Mexico, Michoacán, Morelos, Nayarit, Oaxaca,
Puebla, Quintana Roo, Tabasco, Veracruz and Yucatan .
RISK
ECUADOR:- Russia, which buys 95% of the bananas it consumes from Ecuador, in 2015 and
2016 there were losses due to the rapid devaluation of the ruble and a lower purchasing
capacity, although it remains the first customer by country, taking 23% of the production.
The United States, also a customer of Ecuador, is a threatened market. There could lose share,
we have competition from Guatemala, which is very close and also the sector is dominated by
four producers who have virtually a monopoly and lower prices
MEXICO:- The risks in the production of Mexican bananas, are the strong winters because of
that crop pests are encrusted, in such a way that the main objective was to know and avoid this
tropical race 4 plague, affect the annual national production of three million tons of bananas,
mostly for domestic consumption.
In the banana plantations of the national territory there are insects, bacteria and fungi that could
put the economy at risk if they become a pest.
For example, the black sigatoka, the bacterial moko, the black palm weevil and the heart rot, is
why there is a need to establish international preventive measures.
DESTINED BETWEEN LOCATIONS
ECUADOR:- Sending bananas from Ecuador to China takes between thirty to forty days, the
competitive prices of Ecuadorian versus Mexican bananas.
In addition, bananas from South America, in general, are of high quality and most of them have
obtained the import permit from the Chinese authorities. But only Ecuadorian bananas, and to
some extent Costa Ricans, maintain a visible presence in China.
Exportaciones ecuatorianas de banano (USD Millones)
MEXICO:- In what corresponds to foreign trade, the banana "Made in Mexico" is exported to
34 countries, including the United States, Guatemala, the Netherlands, the United Kingdom,
Spain, Japan, Russia, South Korea, Albania, Tunisia, Singapore, New Zealand, Portugal, Hong
Kong, Belgium, Italy, Canada, Germany, Ireland, Lithuania and Turkey, among others.
The two main buyers of Mexican plantains are the United States and the Netherlands, whose
imports reach 155 million 119 thousand dollars, 78.7 percent of the total of purchases made
from abroad to Mexican producers.
Likewise, this product has a participation of 11.3 percent within the national production of
fruits.
CONCLUSION
Through the analysis developed, it can be shown that the banana sector is one of the most important
sectors of the country and that Ecuadorian exports in 2016 with 40.6% and is the main exporter of
bananas in the world, with a total participation of 29.0% in 2015
We have decided as the best market to China to sell the banana for the amount of people in this country
and its rapid economic growth.
The Chinese market is so big, that it can accept our product in important volumes. The idea is to increase
the banana trade to this country, which has been happening since last year and as an effect it will increase
more and more.
Ecuador has a great advantage with the climate since throughout the year it has banana production which
is very important for foreign customers in any season, which guarantees the stability of the offer.
