BACK	AGRICULTURE-ECONOMY: Ecuador is Top Banana

In fact that figure reflects only the first 11 months of the year, and the final total will be even higher, says Ecuador's the National Association of Banana Producers (ANBE). Already, the sale of 4.07 million metric tons of bananas represents an increase of 18 percent on 1996 figures while banana sales also accounted for five percent of the Gross Domestic Product (GDP) for 1997.

The results were somewhat suprising ''considering that producers and exporters are having to endure a series of problems that we have never experienced in the past", said Simon Canarte the ANBE president.

The loss of 10.000 hectares - blamed on the El Nino weather phenomenon - as well as internal struggles over prices between producers and exporters and trade battles with the European Union (EU) over import quotas, are just some of the problems that the sector was forced to overcome.

Canarte recalled that at the beginning of year, banana producers held a strike in order to pressure the large exporting firms to pay their official price while exporters such as the Noboa Group (the largest in the country), argued that the price should be set by international demand.

''The government managed to resolve the dispute by forcing the exporters to pay a fair price,'' said Canarte.

According to the Central Bank of Ecuador, banana sales in the international market reached significant levels in the first semester of the year, even surpassing those for oil, which for the past 25 years has been the prime source of export revenues.

Between January and July, banana sales were worth 594 million dollars, compared to 576.4 million dollars for oil.

Esteban Vega, an expert at the Corporation for Development Studies, said that this situation can be explained by the fall of international prices for crude, and a rising trend in exports from the private sector vis-a-vis those from state enterprises, the most important of which is oil.

According to Vega, banana exports in 1998 are expected to reach even higher levels. Other products - such as shrimp, flowers, coffee and cacao - are also expected to have increased sales, while the demand for oil will remain stable.

''The most influential factor in this year's success stemmed from the earlier dispute with the European Union,'' observed Segundo Wong, president of the Rey Banano export company.

Wong was referring to the existence of an import regime based on quotas and licenses that the European Union imposed in 1993 in order to protect former European colonies that produce bananas in Africa, the Caribbean and the Pacific. These measures became Ecuador's "most powerful weapon", said Wong.

In 1994, the system of imports was accepted by Colombia, Costa Rica, Nicaragua and Venezuela, and rejected at the World Trade Organization (WTO) by the G-5, made up of the United States, Ecuador, Honduras, Guatemala and Mexico.

While the disputes between the G-5 and the EU were taking place, ''Ecuadoran exporters were opening up new markets considered insignificant in the past, in places like Asia, Eastern Europe and Latin America,'' said Wong.

In September, a panel of experts of the WTO studied the conflict and issued a decision favorable to the G-5, establishing that the EU had to change its system of quotas and licenses, as these were considered to be contrary to the principle of free trade.

In 1998, after a series of meetings and agreements between the G-5 and the European bloc, the new system will enter into force. For Ecuador, ''this will mean greater opportunities to place its product in the European market, which up until now has been one of its biggest buyers,'' said Canarte.

Fifty-two percent of banana production in Ecuador is exported to Europe, and 76 percent of that total volume is purchased by the 15 countries of the European Union.

''The European market is important for us, but it isn't the only one,'', concluded Wong, who was one of the pioneers in exporting bananas to China, the biggest market in the world. (END/IPS/mg/dg/if/ea/mk/.97)