Fedexpor calculates losses in the non-oil export sector at $100 million as a result of the June protests

The president of Fedexpor, Felipe Ribadeneira, indicates that the problems for the productive sector remain latent.

The Ecuadorian Federation of Exports (Fedexpor) estimates the losses in the country's non-oil export sector at $100 million as a result of the indigenous protests last June against the high cost of living, which lasted 18 days.

In the three weeks of mobilizations, in which six deaths were recorded, and which were characterized by the blocking of roads and the blocking of roads, public and private property was also damaged.

The president of Fedexpor, Felipe Ribadeneira, pointed out toEfethat within the framework of the protests “the harvest cycles were damaged, there were direct attacks on the productive chain, on private property, and the entire production process was hindered.”

The protests in the streets ended with the signing of an “act for peace” in which the Government and the indigenous and peasant movement agreed to address the demands of the protesters in thematic tables for 90 days.

And although the dialogues are underway and the first agreements have already been reached, Ribadeneira pointed out that the problems for the productive sector remain latent, since the productive capacity of the companies was reduced.

Flower growers, among the most affected

“We need to look for mechanisms to access cheap credit,” he commented, noting that other ways should also be looked for to help the export sectors that suffered the most in the strike, such as flower growers, banana growers, fruit growers and frozen vegetables.

These sectors generate employment in the rural sector, and if companies do not export and have no income, they must reduce costs, which could cause unemployment.

The export sector in Ecuador employs more than 1.5 million people directly and about 500,000 more indirectly.

Ribanedeira added that we must try to recover the lost productive mass and “for that we must help the sectors that were savagely attacked during” the protests.

If the Government “could not defend” the right to private property, he said, “somehow there has to be compensation.”

The president of Fedexpor explained that the June protests were the longest in the country, and left losses of “one hundred million dollars only in the non-oil export sector, but at the level of the country's global economy, there is talk of more than “1 billion dollars in losses.”

However, losses in the export sector may increase, since they are waiting to know future losses due to crops and cycles that were interrupted, and to know which companies will be able to recover their productive capacity and export as before.

Dollar appreciation

For the purposes of the June mobilizations, exporters are now adding problems due to the appreciation of the dollar, which has been the standard of exchange in Ecuador for more than two decades.

“We are very concerned because we are experiencing moments that have not been seen in the last two decades,” with an appreciation of the dollar “as strong as what is happening,” he said, recalling that the United States and Europe are among Ecuador's main markets. .

The strengthening of the dollar implies that Ecuador's sales lose competitiveness in the destination whose currency is depreciating.

But not only does the Ecuadorian product become more expensive at the final destination, but it also becomes more expensive compared to the products of its competitors, given that these economies also have depreciated currencies against the dollar in the last month, Fedexpor maintains.

And although a strong dollar implies that imports of inputs, raw materials and capital goods become less expensive, this drop in costs does not compensate for the loss of competitiveness that Ecuadorian products have at destination.

Despite everything, Ribadeneria values ​​local exporters as “very competitive”, who now face a moment of reinvestment to try to maintain the growth levels of 2020, when they closed with 16,000 million dollars, while in 2021, they were 18,000 million, a figure they hope to maintain this year.