A month of war destroys what was built for years

More than a month has passed since the start of the war in Ukraine. The number of deaths, injured and displaced people continues to rise. One in four Ukrainians has left their homes, meanwhile the rest are trying to adjust to living amid sirens and latent risk. The community is definitely not the same. When the war is over, they must not only rebuild cities but society.

The war has also strained international and inter-institutional relations. Trust is fragile. And in the midst of a complex global framework is the common woman and man. In the end, everything is connected, and their daily lives depend on the socioeconomic context affected by the war.

The various nations have felt the impact, each according to their relation to the Eastern European market, or more specifically the Russian market. I will refer to the impact on the Ecuadorian banana industry.

In the eighties, the Soviet Union was an emerging market for Ecuadorian bananas; twenty thousand metric tons of the fruit were exported annually to that destination. From the nineties, the Russian market grew until it became the main buyer for Ecuador. At the beginning of 2022, Russia represented 24% of total banana exports. Approximately 95% of the bananas imported by Russia came from Ecuador. If we compare it in metric tons, until before the current war, Ecuador came to export 1.4 million annually.

All the effort made for more than forty years has collapsed in a month. Exports from Ecuador to Russia and Ukraine in volume of boxes have been reduced by 58.55% so far. This represents 23.92 million dollars in accumulated FOB losses in 4 weeks. What does that imply for our society? There are 50,000 direct workers and 250,000 indirect workers serving the Russian market. The current reduction in exports due to the war has already put at risk the employment of at least 25,000 agricultural workers. Likewise, this has repercussions on related industries: transport, the cardboard sector, suppliers of products and services in general. As the conflict progresses, the impact will be greater. These are not just figures, we are talking about men and women, specific people, with families that depend on them and their honest and dedicated work.

On the other hand, this situation that began affecting the Russian and Ukrainian markets extends to all the world markets that Ecuador supplies. This is due to the devaluation of the fruit as a result of the over-demand.

It is sad to see how what has been achieved with the hard work of years is affected so quickly. And for this reason, in times of uncertainty and threat, it is necessary for the banana sector and the entire value chain to come together to face this harsh situation. We must fight for what we have built over all these years working with greater strength and determination.

As a country, it is necessary to strengthen relations with multilateral organizations that can support us at this juncture. The situation is serious, and we have been greatly affected by a war that is not ours, and that should never have taken place. Dialogue and coordinated work between the public and private sectors are essential. Great challenges require unity.

Vicente Wong
CEO Reybanpac