Agriculture in Ecuador: Terminal Market Trends and Suppliers’ Insights

Ecuador, meaning "equator" in Spanish, is located in northwestern South America. Bordering Colombia and Peru, it faces the Pacific Ocean with a 930-kilometer coastline. The country comprises four distinct regions: the western coastal plain, central Andes Mountains, eastern Amazon Basin, and Galapagos Islands, each with unique climate and geography.

Western Coastal Plains

This region spans approximately 72,000 square kilometers, with elevations typically below 300 meters. It features a tropical rainforest climate, with average temperatures ranging from 23°C to 25°C. Annual precipitation gradually decreases from 3,000 mm in the north to about 500 mm in the south. The area is characterized by numerous rivers and fertile soil, making it a major 

producer of agricultural products such as bananas, cocoa, coffee, and rice.

Central Andes

Covering about 67,000 square kilometers, this region features the Andes Mountains split into eastern and western ranges, forming a plateau that slopes from north to south. The average elevation ranges from 2,500 to 3,000 meters. Its diverse climate spans from year-round snow on peaks above 4,000 meters to subtropical forests and tropical savannas in lower areas. This region is crucial for Ecuador's crop cultivation and animal husbandry.

Eastern Amazon Region

Part of the Amazon River Basin, this area is predominantly virgin forest with elevations between 250 and 1,200 meters. The climate is consistently hot and humid, with annual rainfall of 2,000 to 3,000 mm and an average temperature of 25°C. It's a key oil-producing region in Ecuador.

Galapagos Islands

This Pacific archipelago comprises 13 main islands and over 100 smaller ones, totaling 7,976 square kilometers. Formed by volcanic activity, these islands host unique wildlife including giant tortoises, marine iguanas, and tropical penguins. Often called a "living natural museum," UNESCO designated the Galapagos as a "Natural Heritage of Humanity" in 1978.

While Ecuador's industrial structure remains relatively underdeveloped with limited technological advancement, the country has carved out niches of excellence. It demonstrates particular strength and competitiveness in specific sectors, notably shrimp aquaculture, banana cultivation, and floriculture.

Flower Industry: Ecuador's Blooming Success

Ecuador's floriculture sector stands as a cornerstone of the national economy, significantly enhancing living standards, particularly for mountain communities. The industry maintains its global competitive edge through:

1. Unique geographical and climatic conditions

2. Diverse flower varieties

3. Advanced cultivation techniques

4. Modern scientific management practices

Product Range: Ecuador boasts an extensive array of flowers, including roses, dianthus, lemon plants, deer tongue grass, carnations, musk bamboo flowers, chrysanthemums, velvet ball flowers, asters, and various summer blooms. These not only beautify the environment but also constitute a vital component of Ecuador's export trade.

Economic Impact:

• Over 1,700 flower plantations

• More than 600 export companies

• Direct employment: 87,000 in cultivation and export

• Auxiliary work: 44,000

• Indirect involvement: Approximately 150,000

This data underscores the flower industry's crucial role in Ecuador's economy and its significant contribution to employment opportunities.

Donovan Escobar

COO at Tessacorp

To delve into the intricacies of Ecuador's floriculture sector, AgroPages has engaged in a dialogue with Tessacorp's Chief Operating Officer. This exclusive interview aims to shed light on the industry's landscape, offering insights into its operational dynamics, prevailing challenges, and emerging opportunities, thereby enhancing the reader's comprehension and perspective.

Could you briefly introduce the business Scope and mission of Tessa Corporation? What is the company´s position in the flower industry in Ecuador? In the agricultural sector of Ecuador, are there more large-scale planting enterprises like yours, or are small scale farmers more prevalent?

TESSA's business model is based on growing and exporting roses of the highest quality and always committed to our internal and external customers. We focus on taking care of our employees and promoting operational excellence. The execution of sustainable and environmentally friendly practices makes us the number one choice in offering the best product to meet and exceed the expectations of Tessa customers.

Tessa's growth in the international market is noticeable. Its vision has grown to achieve industry leadership, producing the most advanced systems within floriculture but always valuing the traditional. Over the years, it has built a strong reputation and brand name in all markets and has become one of the leading luxury suppliers in the world.

In Ecuador, there are several companies dedicated to the flower sector. 60% of the area of production is consolidated in regular companies which produce and export by itself, the other 40% are small business which sale their flowers to big companies and are not regularized.

Your company´s flower cultivation mainly uses greenhouse. When encountering extreme external, environments, such as high temperatures, do you encounter difficulties in cultivation or does it lead to increased cultivation cost? In the cultivation cost, which part of the investment is the largest? Where does the cost of agricultural chemicals rank in the overall expenses?

Ecuador's unique geographic climate and location help us better control the high temperatures inside the greenhouse.

Tessa's location is in the province of Cotopaxi, south of Quito, 9350 feet above sea level, making Tessa's location the best region in the country for flower production.

In some cases, when the radiation is higher, we ensure that the greenhouses have an adequate ventilation system and that the soil maintains enough humidity. This particular practice is accomplished through advanced irrigation systems.

During the flower cultivation process, have you encountered any difficult to manage diseases, pests, nutritional issues, or cultivation operation problems? What measures does your company usually take to solve these problems？

Phytosanitary diseases within flower companies are common since we face climate changes, macro, micro-location, irrigation, and pesticides, among others.

Each of the processes carried out within the Tessa company is aimed at the prevention of diseases through cultural work, optimal fertigation, and enough doses for the different incidence thresholds of pests and diseases that occur. I believe that planning specific tasks executed by the human talent that works in the company Tessa leads to the success that the corporation presents.

Where are your company´s flowers mainly sold? Is there any specific testing required for the flowers during the sales process? Does your company need to obtain any specific certifications to ensure the quality of the flowers? How does Tessa Corporation ensure the quality of its flower products? Have you encountered challenges in balancing economic benefits with ecological responsibilities?

Tessa has a global presence. Our prior markets are Russia, Europe, and North America. The reliability that we have cultivated and nurtured in our businesses reflects taking care of our customers by offering a quality product. Our roses and flowers are distributed by wholesale partners who share our passion and vision for distributing quality products through optimal transportation chains and conditions.

Tessa has four certifications, which allow us to manage an integrated adequate management system focused on meeting the requirements for the export of products. Flor Verde Certification, Flor Ecuador Certification, BASC, and Rainforest.

How does Tessa Corporation ensure the quality of its flower products? Have you encountered challenges in balancing economic benefits with ecological responsibilities?

We always aim to improve our processes, focused on sustainability and continuous improvement. Tessa's quality shows to the world are notorious, based on delicate care and quality control from different critical points, harvesting, flower processing (post-harvest), packaging and cold chambers, shipping, and distribution. Each process has quality product auditors who control the optimal requirements to continue the process. Our products that do not meet the required quality standards go through a deregistration process.

The company has a work team defined as Controllers, which reviews, analyzes, and determines compliance with each process. This control leads us to minimize errors and in case of findings, proposes action plans. Its main focus is the Lean methodology.

It is essential to not only offer high-quality products. Also, ensure that our practices are sustainable and environmentally friendly. To address these challenges, we have implemented several key strategies:

（1）Innovation in sustainable crops

（2）Environmental Certifications

（3）Waste Reduction

（4）Collaborative Education

（5）Technology investment

Alfredo López V.

CEO at Barad S.A.

The global cannabis industry is witnessing exponential expansion, with projected revenues to soar to $64.73 billion by 2024, as per Statista Market Insights. The United States is at the forefront of this surge, anticipated to contribute $42.98 billion to the total revenue in the aforementioned year. The industry is forecasted to maintain a robust compound annual growth rate of 3.01%, with an anticipated market valuation of $75.09 billion by 2029.

Shifting focus to Ecuador, the burgeoning cannabis sector merits keen observation. Data from the Central Bank of Ecuador reveals that in 2022, the United States, China, and Panama were Ecuador's top three trading partners in goods, with the United States emerging as the most significant, with a trade volume of $16.02 billion. Ecuador legalized medical marijuana in 2019, yet maintains a stringent stance on recreational use. A previous allowance for personal possession of small marijuana quantities was rescinded in 2023.

Data source: Statista Market Insights

Data time: March 2024

To illuminate the current state and inherent challenges of Ecuador's cannabis industry, AgroPages has secured an in-depth interview with the Chief Executive Officer of Barad S.A. It is our aspiration that this dialogue will offer readers a lucid and comprehensive view of the industry's dynamics, challenges, and opportunities.

Can you briefly introduce your company's business scope and mission? In the agricultural field of Ecuador, are there more large-scale planting companies like yours, or are there more small farmers?

Barad SA is a company created in 2018. But we had already been researching Hemp since 2016. Today in Ecuador we are the largest company in terms of hectare. Our mission is to be the largest supplier of Hemp biomass in the world. We have small suppliers who supply us with products as well.

Your company’s cannabis cultivation mainly adopts open-air cultivation. When encountering extreme external environments such as high temperatures, will it cause difficulties in planting or increase planting costs? Which part of the planting cost requires the largest investment? Where does the cost of agrochemicals rank within total expenses? 

95% of our planting is in the open air, we try to be in the most stable area with respect to the climate that is the mountains, with luminosity of 12 hours all year round, and temperatures do not rise more than 30 degrees and minimums of 10 degrees at night. So there are no thermal deltas. Our average climate is 16-20 degrees most of the year. Most of the cost goes into labor. But that makes us proud to be a source of employment for our people.

During the cultivation of cannabis, have you ever encountered any difficult-to-treat pests, diseases, nutritional problems or cultivation operation problems? What steps does your company typically take to address these issues? 

The truth is that we have not had any kind of pests or diseases in our crops. The only problem would be nitrites in the rainy season, but we have been able to control that without any problem. There have been bottlenecks in the processes, but we have been solving them without problems. Possibly the biggest problem we have faced is that of capital, to be able to continue growing and fulfilling our contracts.

Where does your company mainly sell its cannabis? Does cannabis require special testing during sale? Does your company need to obtain any specific certifications to ensure the quality of your cannabis? 

Our hemp biomass goes 95% to the United States and the rest to other small markets. We send everything with certificates of analysis that meet the standards and requirements of the import country.

How does your company ensure the quality of its cannabis products? Have you ever faced challenges balancing economic efficiency and ecological responsibility? 

Our product is hemp biomass. We comply with all of our client's quality standards. We are on our way to being a certified B company since our processes are completely organic and ecological. We also work with universities to provide raw materials so that all our stems can be recycled to generate natural fibers and bio-plastics.

Is digital technology involved in the cannabis cultivation process in Ecuador? If so, can you briefly introduce it. If not, can you give me a brief answer as to why digital technology has not intervened?  

All our farms are connected to our production platform, so our production managers can know live how the production of each farm is going. We are implementing blockchain processes in order to have a more accurate traceability in the future.

Daniela Maldonado

CEO at CADMA & Asesores

By examining the agricultural terminal market, we've gained an initial grasp of Ecuador's agricultural landscape and identified several emerging challenges. Addressing these issues can be approached through various methods, with chemical interventions, particularly the application of pesticides, being a key discussion point.

Ecuador has demonstrated advancements in the regulation of pesticides. To date, the nation has granted 4,156 pesticide registration certificates across 168 companies, with Rainbow leading in registration numbers. In the top 10 active ingredients, fungicides claim 6 positions, insecticides 3, and herbicides 1. Notably, Mancozeb, a fungicide, tops the list with 197 registrations.

Data source: AgroPages Pesticide Registration Database

Data time: June 2024

To delve deeper into Ecuador's pesticide registration policies and strategic directions, AgroPages has exclusively interviewed regulatory affairs and research analysts from Avgust in Ecuador.

This interview aims to offer readers an in-depth analysis of Ecuador's pesticide registration framework, assess the industry's challenges and opportunities, and provide actionable insights for stakeholders. The insights from this discussion will aid in understanding the trajectory of Ecuador's pesticide industry, thereby fostering the sustainable progression of agriculture.

What are the unique characteristics of Ecuador's agricultural inputs market? How do Ecuador's registration regulations for agricultural inputs differ from international standards?

In Ecuador, approximately 80% of the productive land is concentrated in business agriculture (FAO,2012), that is, land destined for the main crops for both local consumption and export, such as banana, rose, African palm, sugar cane, rice, corn, potato, etc.; and only 20% of this land is destined for the production of food that sustains the basic diet of Ecuadorians. Since the crops that comprise this 80% are of a technical type, they demand solutions that increase profitability, making it necessary to develop specialized agricultural products.

The formulation of these products is practically non-existent in Ecuador, which requires agrochemical companies to import agricultural inputs. Taking into consideration that agrochemicals represent 22 to 35% of the total production cost of crops in Ecuador (APCSA, 2022), it can be inferred that this item makes the final product more expensive and, if external problems may arise in countries from which agrochemicals are imported, there is a risk of an even greater increase in production costs.

Regarding the registration of agricultural inputs, Ecuador manages the pesticide regulations from the 2075 Resolution from the Andean Community of Nations (CAN), which also regulates the countries of Colombia, Bolivia and Peru. The regulatory document, known as the Andean Technical Manual, bases its regulatory principles on European and United States regulations, but takes into consideration the diverse realities of the member countries, both for the execution of field trials and for registration as such.

The main regulatory differences are based on the allowed or not allowed molecules that, in most cases, are not allowed to be marketed in the EU, while in Ecuador they are, as is the case of several neonicotinoids or paraquat.

Additionally, the average time it takes to register a pesticide product in Ecuador, once the field trials have been carried out, is approximately one year, while in the EU there have been deadlines of up to 5 or 6 years for the registration of pesticides.

What are some local innovations in the field of agricultural inputs in Ecuador? Can you share any successful case studies of agricultural input registration in the country?

Within the field that refers to pesticides, as mentioned before, in Ecuador the development of these products is practically nil.

Fertilizers have been developed into bio-type varieties, specifically organic foliar and soil fertilizers. These biofertilizers are natural products derived from the anaerobic digestion of organic residues, including animal manure—predominantly from cows and sheep—as well as sugars and nitrogen sources like legumes.

Additionally, biological pesticides are on the rise, such as microorganisms, natural enemies and plant extracts.

It is important to consider that the registration of these products is carried out under national regulations, developed by the Competent Authority in Ecuador, which is Agrocalidad.

Under the standards of the Authority, both fertilizers and biological products have been registered. It can be mentioned as successful case the registration of plant extracts such as Matrine and Tea Tree Extract; and in the case of microorganisms the record of Trichoderma harzianum, Paecilomyces lilacinus, Beaveria bassiana, several types of Bacillus and mycorrhizae.

What are the most popular products in the registration sector of Ecuador's agricultural inputs market, such as pesticides, fertilizers, or biostimulants? Which crops are most favored in terms of product registration?

In Ecuador, within the field of fertilizers, there are mostly inorganic products such as urea and products that mainly contain the nutritional complex nitrogen, phosphorus and potassium (N, P, K) in different proportions. In the case of biostimulants, the main records are amino acid complexes, colloidal silver, fulvic acids, humic acids and products derived from Ascophyllum nodosum.

Regarding pesticides, the highest percentage of records correspond to herbicides such as glyphosate, glufosinate ammonium, paraquat, 2,4-D, among others. In the case of fungicides and insecticides, the record is smaller but the main molecules to mention may be chlorpyrifos, profenofos, thiamethoxam, lambda-cyhalothrin, mancozeb, dimethomorph and fosetyl-Al.

In recent years, new molecules have been registered by generic sales companies, but as the registration of this new pesticides is linked to the release or not of patents at a global level, this processes, in many cases, have been delayed.

The most favored crops in terms of registration would be those with the largest cultivated area in the country, which correspond to banana, roses, broccoli, pitahaya, African palm, sugar cane, pineapple, potatoes and vegetables (especially in the fertilizer issue).

What is the proportion of biological products to conventional chemical pesticides in Ecuador's agricultural market?

Being that Ecuador is not a country whose agricultural production can be considered ecological, with only 3% of national production being organic (Agrocalidad, 2022), the requirements of producers have not led agrochemical companies to search the registry of biological products.

It has been in the last five years that, given the demands of the international market, mainly Europe and the United States, agro-export groups have begun to look for alternatives to conventional pesticides. This market determines the values of maximum residue limits (MRL) allowed for the product to enter its country. Taking into account that the MRLs of biological products are practically 0, they are the most viable option so that marketing to these markets is not closed.

Also as a requirement if this same market, farmers must submit to organic certifications, which list, depending on the target market, which agricultural inputs will be allowed for application depending on each crop.

How do you view the future development trends of Ecuador's agricultural inputs industry?

Considering that Ecuador is an agro-export country, the development of trends regarding agricultural inputs industry will always be linked to the demands of the market and international regulations.

Today, we can say that the trend is going towards the registration of biological products for use in the main crops and, in turn, the registration of new chemical molecules, which prove to be less toxic for human health and friendlier with the environment.

Pablo Alvarez

Country Manager at EI Agro

To enrich our discourse on Ecuador's agricultural sector, AgroPages has extended an invitation to El Agro's country manager to contribute his insights. His involvement promises a localized viewpoint, enabling a more holistic appreciation of the prevailing conditions and the array of challenges within Ecuadorian agriculture. This collaboration will enhance our dialogue, ensuring a well-rounded understanding that reflects the nuances of the local agricultural context.

Can you briefly introduce your company's business scope and mission? In the agricultural field of Ecuador, are there more large-scale planting companies like yours, or are there more small farmers?

 El Agro is a company that has been present in the Ecuadorian market for 40 years. It focuses on offering solutions to farmers to help them manage their crops with products that are safe, economically relevant and technologically advanced. El Agro is located in Riobamba, in the middle of the country, but it has many distribution centers to service farmers that focus on different crops.

The company has focused on post patent products and in the last 10 years it has completed a biological portfolio to attend organic and cleaner farming.

What is the most popular product in the pesticide market in Ecuador at present? Which crop do you think will have the most market potential in Ecuador in the future?

Ecuador has a variety of crops so it is very difficult to say which one is the most popular. But according to the volume of imports herbicides are the most purchased. In the herbicide section Paraquat is the most popular product and glufosinate is increasing very fast.

We believe that in the future crops like organic bananas, non GMO corn, dragon fruit, summer flowers, blueberry and avocado have a big opportunity to grow because of their high demand all over the world. Ecuador has a privileged weather, which makes it an excellent country to grow all year round.

What crop fields are the end customers served by your company mainly targeting, and what are the trends in drug use? Which part of the planting cost requires the largest investment? Where does the cost of agrochemicals rank within total expenses？

The most important crops for us are non GMO corn, rice, banana, potato, dragon fruit, flowers, tomato, and vegetables.

Pesticides are widely used, however export products like banana, dragon fruit and flowers are becoming familiar with bio pesticides and bio fertilizers. The regulations of countries in the EU, Asia and USA are making our farmers take action on reducing pesticide residues in fruits and flowers. Also certifications like Global Gap and Fair Trade are prohibiting certain pesticides to be used in certain crops.

The higher cost of a crop usually is the installment. Plants or seeds, fertilizer and machinery commonly are the largest investment in setting up a plantation. We would say that pesticides are around 25% of the total cost in most cases. However, it depends on the crop and if this one is seasonal or perennial.

In the agricultural production process in Ecuador, how acceptable are agricultural growers to biological agents? What are the more common biological products currently on the Ecuadorian market? Which crops or problems are targeted?

For farmers that export crops especially to the EU, Asia and USA biological agents are widely used. The main reason is to reduce chemical load, meet regulations and reduce maximum residue limits.

The most common biological products are plant extracts and microbial products. Banana is an important crop where these products are being used specially for diseases like Black Sigatoka and Moko (Ralstonia solanacearum). In flowers these products are also used for Podosphaera pannosa or also for pests like spiders and thrips. Soil remediation is also becomming popular for many crops where we can see prebiotics and postbiotics being used directly on the soil or applied to granular fertilizers.

In the agricultural planting process in Ecuador, what are the pests, diseases, nutritional problems or planting operation problems that are currently difficult to deal with? Does your company have the right products to solve these problems?

In the past 8 months a disease that has become a huge problem is Ralstonia solanacearum, also called Moko in Banana. This disease is very aggressive and has caused a lot of damage in the northern banana area. There is no actual product that can control this bacteria.

To have better control we must follow a very cautious protocol. Disinfection of tools and footwear must be done before entering a lot. Footbaths have to be installed in all the lot entrances and be controlled so that their disinfection active ingredient is working all the time. Also no animals like dogs or cats are allowed in the field because they might become a vector of the bacteria.

In the field the use of biological products like microorganisms, organic nematicides and prebiotics are being used to repopulate beneficial organisms. In theory these organisms will compete with Ralstonia solanacearum for space in the soil. By air we also apply plant defense inductors like phosphites, prebiotics and microorganisms to help the plant defend itself from the bacteria.

Does the farming process in Ecuador involve digital technologies? If so, can you briefly introduce it? If not, can you briefly answer why digital technology hasn’t stepped in?

There are some options for digital technology, especially on big farms. There are various options like water management and irrigation technologies, weather collecting information and information collection.

We hope in the future we can introduce digital technologies to medium and small farmers. We believe that digital technology hasn't sped up because of costs and language barriers. Also there are more limited options for tropical crops.

Conclusion

Amidst the tide of globalization and the swift evolution of scientific and technological advancements, Ecuador's agricultural sector finds itself poised at a fresh juncture. The industry's dynamism is evident in the thriving floriculture sector, the burgeoning cannabis market, and the strides made in pesticide regulation, as exemplified by companies like Tessacorp and Barad S.A. These developments underscore the sector's diversification and untapped potential.

Moreover, the ventures of Elagro and Avgust in biopesticides and digital technologies chart a pioneering course towards sustainable farming practices.

Confronted with the demands and challenges of the global marketplace, Ecuadorian agribusinesses are proactively recalibrating their strategies. They are bolstering their competitive edge through technological innovation and strategic international alliances. With a pronounced commitment to eco-friendly and sustainable farming, there is an optimistic outlook for Ecuadorian agriculture to embrace a future characterized by greener, more efficient, and smarter farming techniques.

In essence, Ecuador's agriculture is navigating a pivotal phase of transformation. Through relentless pursuit of knowledge, innovation, and collaborative efforts, the nation is well-positioned to ascend to a more prominent role on the global agricultural platform.