Diplomatic tensions between Ecuador and Russia have been resolved after Ecuador decided not to send any war material to a country involved in an international armed conflict. This decision comes after President Daniel Noboa announced that Ecuador had agreed to exchange Russian military equipment for new US weapons worth around $200 million. The original plan was to send six Russian military helicopters, long-range rocket launchers, and air defense systems from Ecuador to the United States, and then to Ukraine. However, Moscow criticized the decision and imposed restrictions on Ecuadoran banana and flower imports. The Russian embargo on five banana exporting companies has since been lifted. Ecuador, being the world's biggest banana exporter and one of the top exporters of flowers, was heavily impacted by the ban. The resolution of this issue has helped ease tensions between the two countries [d8c64121] [57a4811f].
Despite the resolution of the tensions, the ban on banana imports from Ecuador by Russia has already had significant consequences. The ban affects about 30% of Russian banana imports from Ecuador, which sells almost $700 million worth of bananas to Russia each year. This retaliation could cost Ecuador 0.5% of its GDP and impact 25,000 jobs. The ban also affects Russian consumers, as bananas account for 21.7% of all fruit sales in Russian retail chains. Banana prices in Russia have already risen 75% since the start of 2022 [28823818].
Russia has initiated purchases of bananas and papayas from India amidst escalating tensions with Ecuador, its primary banana supplier. However, India has no need to do Moscow any favors. Rising prices for bananas will further fuel inflation in Russia and disproportionately affect the country's least well-off [28823818].
Ecuador is the world's leading banana exporter, with sales worth approximately $3.5 billion in 2022, and Russia accounts for about a fifth of its annual sales. The ban on banana imports from Ecuador is seen as a possible retaliation for the military equipment transfer. Ecuadorian officials are hopeful that diplomatic talks will help resolve the impasse [57a4811f].
On a different note, Vietnam has signed protocols with China to officially export fruits and vegetables, opening up new opportunities for businesses and farmers. The protocol on plant quarantine requirements for fresh watermelons is expected to double watermelon exports to China in the coming year. In the first 10 months of 2023, Vietnam's watermelon exports to China reached $44 million, and this figure is projected to exceed $50 million in 2024. Additionally, Vietnam and China have signed a protocol on the export of fresh bananas, resulting in a 2.3% increase in Vietnamese banana imports into China. Vietnam's total fruit and vegetable exports reached $5.19 billion in the first 11 months of 2023, with China being the largest market at $3.4 billion. Durian has surpassed dragon fruit as the highest-value export product, reaching $2.2 billion in 2023. Vietnam currently has 14 agricultural products approved for export to China, including durian, dragon fruit, and watermelon. The Ministry of Agriculture and Rural Development is working on completing the necessary documentation for an additional six products. However, domestic businesses and farmers face challenges in meeting technical requirements and food safety regulations [4c1888ae].