Repercussions of the war between Russia and Ukraine for Ecuador

On February 24, the war between Russia and Ukraine began, a conflict that, according to United Nations figures, until March 7 reported 474 deaths and more than two million displaced persons. A painful situation to see, and even more heartbreaking for those who suffer from it firsthand.

Faced with this reality, we first want to express our solidarity with the victims and join the call for peace, so that a prompt solution can be reached through diplomatic channels and dialogue between nations. War only generates pain for humanity and irreparable losses, breaks relations between countries and generates an expanding crisis worldwide in social and economic terms.

What effects does the war between Russia and Ukraine have on Ecuador and its banana industry?
The impact of the war conflict crosses borders. It has repercussions in neighboring countries that today receive thousands of refugees. It generates complications in the global logistics chain, which has already had problems since the pandemic. And it influences the social and economic reality of the countries that acted as trading partners of these countries.

In the case of Ecuador, and specifically in relation to the banana sector, Russia and Ukraine together represent 25% of its exports. Russia is the second destination with approximately 1,800,000 boxes per week. Although there is still fruit being exported, there is already a reduction of 760 thousand boxes of bananas per week as a result of logistical and financial complications, as well as the decrease in demand due to the devaluation of the ruble.

As for the Ukraine, it is a market of 180,000 boxes per week. Since the previous week and given the impossibility of access, the fruit had to be diverted and sold in the Mediterranean area. It is important to mention that it is not possible to replace the Russian and Ukrainian markets in the short term due to the lack of shipping spaces.

From a social perspective, this problem has a direct impact on a large number of small and medium banana producers. The banana sector is one of the main job creators in rural areas of Ecuador. Of this group, 61% is made up of small producers with less than thirty hectares of production, and 25% by medium-sized producers with less than one hundred hectares.

Around fifty thousand hectares are destined to produce for the Russian and Ukrainian markets. Therefore, approximately 50,000 direct jobs and 250,000 indirect jobs will be affected if this conflict continues.

In this sense, and aware that the war and its future scenario is beyond our control, we call for the public and private sectors to work hand in hand to mitigate the impact of a force majeure conflict. We trust that through a joint effort it will be possible to prevent the loss of employment of thousands of Ecuadorians in rural areas.