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EC Maintains Preferential Tariff for Banana from Nicaragua

15.6.2018

The European Commission (EC) has decided not to temporarily suspend the preferential customs tariff for banana imports from Nicaragua despite the fact that on April 10th it exceeded the threshold of 14,000 tons defined in the association agreement with Central America.

According to the EC Decision published on June 15th by the Official Journal of the European Union (OJEU), "it is not appropriate to temporarily suspend the preferential customs tariff" since, despite exceeding the amount fixed, "nothing indicates that the stability of the Union market has been disturbed" by such imports.

The EC further argues that "in April 2018 there were no indications of a threat of serious deterioration in the Union market or of a serious deterioration of the economic situation in the outermost regions of the Union", including the Canary Islands.

The EC explained that it has adopted this decision after examining the effect of import prices and the stability of the banana market in the EU.

"When they exceeded the 2018 threshold, Nicaraguan banana imports represented only 1.2%" of the total banana inputs "subject to the stabilization mechanism" and only "1.0% of total imports to the European Union," it added.

Other banana producing countries with which the EU has also signed a trade agreement are Colombia, Ecuador and Costa Rica, whose thresholds stood at 17.8%, 23.4% and 22.2% in April, respectively.

"The 'unused' quantities subject to the stabilization mechanism (approximately 4.8 million tons) far exceed the total imports from Nicaragua to date (14,787 tonnes)," the EC clarified.

As for the average price of Nicaraguan imports, it is precise; the amount in the first two months of 2018 was 488 euros per tonne, 26% below the average prices of the other imports of bananas in the Union.

Despite the low price of fruit imported from Nicaragua, the average wholesale price of bananas on the Union market in March 2018 did not register any downward change and remained high, according to the EC.

"Indeed, in March 2018, the average wholesale price of "Canarian bananas" and bananas from all origins was € 1,094 / t, 11% higher than the corresponding price in March 2017 (€ 977) / t) ", he emphasised.

In addition, in March 2018 the average wholesale price of bananas produced in the Union was € 1,006 per tonne, "which is comparable to the level of March 2017 (€ 996 / t)".

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