Asprocanhas warned on Tuesday that thebusiness agreementbetweenEuropean Union(EU) and Mercosur, reached after 20 years of negotiations, increases the risk ofoversupplyof banana in themarketfrom third countries, given that the tariff goes from 114 euros per ton to 75 euros.
According to this agreement, the Mercosur countries will join since January 2020 to the preferential tariff conditions for the export of bananas that are already enjoyed by Ecuador, Colombia, Peru, Costa Rica, Panama, El Salvador, Honduras and Guatemala.
Among the Mercosur countries, only Brazil exports bananas to the European Union market and although these export quantities "are small", Brazilian production has agreat potentialagronomic and has the infrastructures and experience necessary to increase their exports of bananas, in addition to having some of the most important multinationals in the sector of banana production and export worldwide, warn from the association.
According to Asprocan, if the agreement is ratified by the national parliaments of the 28 EU Member States, the European Parliament, theMinister councilof the EU and the four member states of Mercosur, it would "further accentuate" the oversupply that already suffers the EU, aggravating the continued fall in prices in green -12% since 2015- and reached record prices to the downside in 2018 and predictably will do so again in 2019.
The production figures of Brazil stood at 6.6 million tons of bananas in 2017, with a tendency of slight decrease since 2011, year in which 7.3 million tons were produced, while Argentina produced 175,000 tons and Paraguay 72,000 tons, while Uruguay does not produce.
For Domingo Martín, president of Asprocan, "we are again faced with the situation that a new free trade agreement is favoring the increase of imports of bananas from third countries to which environmental, labor, social and environmental requirements continue to be applied.securitymuch lower than the European ones, thus increasing competition in unequal conditions and putting European productions at risk ".
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