Colombia is one of main bananas’ suppliers around world, she took the eleven place in 2010 of 136 suppliers. Colombia supplies to 45 countries of 135 countries that demand this product. Therefore, colombians are missing market and on average a gross profit of US$52.8 per tonne if this product had gone to these countries. Therefore Colombia faces a comparative advantage in this product, the idea is to exploit it through new Free Trade Agreements and government’s Lands Law (tierra a tarvés de Ley de reparación de víctimas). The project is to give to people land according to Lands Law with a training course to grow bananas to export, it is fair to remember that a hectare of land produce between 10 and 40 tonnes of bananas.
Author: Humberto Bernal,
Economist
e-mail: zhumber@gmail.com
Colombia is one of main bananas’ suppliers, she produces two million of tonnes per year and took the eleven place of main suppliers as figure 1 shows after Mexico, Guatemala and Republic of Tanzania. Colombia exports approximately 90% of her production. The total world production of bananas was 102.1 million of tonnes in 2010, one can say that a world citizen eats 59 bananas per year approximately. It can be as fresh fruit, in a fruit salad, as a dessert or banana juice (mmm yomy yomy!!!). The main importers of this fruit are USA with 23.3% of total volume imported in 2010; Belgium with 7.4% and Russia with 5.7%; the UK imported 5.4% of total volume imported in 2010. The total world volume imported reached 18.8 million of tonnes in 2010.
Figure 1. Main banana suppliers 2010
(% share of total world production*)
*Total production 102.1 million tonnes.
Source: FAO.
Colombia has been one of most important bananas’ supplier since beginning of XX century through United Fruit Company latter called Chiquita Brands Internationals and nowadays it is called Banacol S.A. in Colombia according to media. This company has faced legal problem concerning to human rights in Colombia (it can be other issue to dealt in next notes). The main colombian fruits companies in Colombia are Unión de Bananeros de Uraba (Uniban) and Banacol S.A. as figure 2 shows. These two companies produce the 68.7% of total bananas’ production in Colombia in 2010, this information does not change in deep for other years. The main regions where bananas are grown in Colombia are Atioquia with 65.9% of total production in 2010, Magdalena with 21.4% and Valle del Cauca with 4.3%. There are other regions where bananas are grown, for instance Cundinamarca and Nariño. This information is valuable due to Colombia must take advantage of their main exported products such as bananas. These activity takes 40 thousand direct employees in Colombia, therefore Colombia government can incentive those regions where bananas can grow. Moreover, according to distribution of land’s Law, government can give this land as a project bananas business.
Figure 2. Main bananas' suppliers in Colombia 2010
(% share of total production*)
*Total production 2,0 million tonnes. C.I. : International Trading company.
Source: Agronet (Bureau of agricultural statistics, Colombia) and Superintendencia de Sociedades.
Gross profits (before tax) from banana production reached US$52.8 per tonne in 2011 in Colombia as figure 3 shows ( a hectare gives between 10 and 40 tonnes of bananas approximately). Therefore it can be a good business for those who want to come back to agribusiness after war conflict faced in Colombia. Banana business is a fair job to start, these new farmers can do it due to it is easy to learn, it does not require high knowledge.
Figure 3. Bananas' gross profit per tonne in Colombia 2008-2011
(US$ current)
(US$ current)
Source: Agronet (Bureau of agricultural statistics, Colombia) and
Superintendencia de Sociedades.
Colombia exports bananas to 45 countries but according to official data from United Nations (Trademap webpage) there are 135 countries which imports more that 10 tonnes per year, the main importer is USA with 2.3 million of tonnes imported in 2011. Therefore Colombia is missing world market, market that can be suppled by new farmers from Lands Law. Table 1 shows the main Most favoured Nation Tariff (MFN) faced by colombian bananas’ exporters, these tariff will be zero in the next years due to Free Trade Agreement world policy, then Colombia must be ready to supply or increase her supply of bananas to these countries and other markets.
Table 1. Bananas’ Most Favoured Nation Tariff for colombian exporters
(Data does not take Trade Agreements)
(Data does not take Trade Agreements)
Country
|
MFN tariff
(% of total money value)
|
Turkey
|
145.8
|
Morocco
|
49
|
R. Korea
|
30
|
European Union
|
16
|
Japan
|
16
|
Georgia
|
12
|
Croatia
|
10
|
R. Moldova
|
10
|
Albania
|
10
|
Cuba
|
7.5
|
USA
|
0.47
|
Source: WTO statistics.
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