El Niño, bad weather in Argentina and delays in the supply from Chile have determined the mood on the blueberry market. Worldwide, there are reports of difficulties in the supply from South America. Because of the lower and delayed supplies from these countries, Peru could take advantage and position its blueberries in the world. Mexico, however, managed to start the season well. Even natural disasters like Hurricane Patricia did little harm to the country's blueberry crops. According to prospects, the consumption of blueberries worldwide will increased by five hundred percent by 2017; the engines for this growth are both Asian and European markets, where the berry is popular because of its health properties.
Demand for blueberries continues to grow, mainly driven by the healthy qualities discovered and appreciated by more and more consumers. Supermarkets are also discovering the marketing possibilities, making year-round supply and promotions more common. Relatively new markets, such as continental Europe and Asia, show great growth rates compared to traditional markets like the United States and the UK.
South America
In the South American continent, Chile and Argentina are facing problems. The Chilean supply has slowed down due to the colder weather. Different export destinations, including the U.S. and Europe, are taking these delays into account. Argentinian blueberries were of lower quality this year; the country expects to close the season with a total volume of 14,000 tonnes, which is sixteen percent less than last year. The main reason for this reduction has been the excess rain and a cold spring.
Plans of Argentinian government good for the sector
The new government in Argentina wants to put an end to the parallel currency, introducing a free market economy and investments in infrastructure. That should reduce the cost of logistics, especially in regional economies, and promote export opportunities. These changes may be beneficial to blueberry exporters.
Chilean season delayed
Because of bad weather, the start of the Chilean season has been delayed. In several export markets, the first containers are expected by the end of the year. At the moment, Chilean crops are suffering the impact of an insect (Aegorhinus nodipennis) which attacks the roots of the plant and can cause its death. The Andes mountain range forms a natural barrier that should prevent this problem from spreading to the countries on the other side of the mountains.
Peru has the advantage of a year-round supply
Peruvian exports, which are still in their infancy, are benefiting from these problems. The country can stay on the market until mid-January-February. When the season ends also depends on the moment when Chile comes into the market.
Peru has considerable amounts of land that could be used for blueberry cultivation, provided the infrastructure and labour are available. The Peruvian government subsidises the development of the fruit's cultivation.
The main markets for blueberries are Europe, North America and Asia. "The advantage with blueberries is that the product is demanded worldwide," explains a trader.
Peru has a competitive advantage over other countries. The country can deliver large volumes basically year-round; therefore, Peru can use sea transport while other countries are shipping the blueberries by air. Growers try to avoid clashing with the season on the northern hemisphere.
Good start Mexican season
The season in Mexico has been good so far. The country has a ten month campaign, with nearly year-round production; the first blueberries from Mexico hit the market in August. The peak is expected for between week 8 and week 12 next year. The Mexican season fits well with Argentina's, which is now ending, and Chile, which will close the season early next year. This year, sizes are larger, which is good, since large sizes are usually more demanded.
The main export markets are the United States, Latin America, Asia and Japan. Additionally, Europe is a major client. Mexican blueberries have no access to the Chinese market, but negotiations are underway. It is hoped that the borders will open next year. Mexican exporters see the advantage in the combined sales of blueberries, raspberries and blackberries, which is a good solution especially for the Japanese market.
Earlier this year, the blueberry crops escaped the impact of hurricane Patricia, although they did recently face a volcanic eruption in Colima. Growing regions such as Jalisco and Michoacan also escaped this threat.
Asia, a growing market
The blueberry market is growing rapidly in Asia; due to the lower supply, the fruit reaches good prices there. Chilean and Argentinian blueberries were delayed by the weather. China and South Korea are the major markets on the continent, but these markets only grant limited access to South American berries.
High demand in China leads to high prices
In recent years, production in China has increased considerably, pushing prices down. The Chinese season starts in June at the main production regions: Shandong, Liaoning and Guizhou. Due to strong demand and the small production, prices for blueberries are generally higher than in other markets.
Since 2013, the acreage in the Shandong province has grown by fifty percent. This season, prices started at around 90 yuan (€ 13.20) per kilo, which is 35 percent lower than a year earlier. By the end of July, the price dropped to 50 yuan (€ 7.30) per kilo.
Besides its own production, berries are imported from Chile. Argentina is negotiating its access to the market, which is expected to happen in the short term. Next week, a Chinese delegation will visit Argentinian production locations to establish a protocol for next year; Chilean berries reach 25 yuan (€ 3.70) for 125 grams in Shanghai.
French demand exceeds supply
Due to reduced shipments from South America, demand for blueberries in France currently exceeds the available supply. This has resulted in high prices. Due to rising demand, there is a shortage of berries, explains a trader. Prices stand at around sixteen Euro per kilo and are expected to remain at high levels until Chilean berries hit the market. "We heard that the supply from Chile is thirty percent lower," said a trader. The first shipment of Chilean blueberries is expected in week 52.
Italy registers stable prices
Italian growers and traders have noticed an increase in consumption, especially during the European season. During the import season, the growth rates are lower. In the Italian market, the most popular formats are 125 gram packs, while other countries also offer 250, 500 or 750 grams. In order to boost Italian blueberry consumption, more information about the berry needs to be made available, according to traders.
Growers are facing increased competition from nearby countries like Spain, Morocco and Germany. Over the next five years, the volume is expected to double. The Italian season runs from May to October.
While prices reached record levels three years ago, at the moment they are stable. Last year, there was a sudden drop in prices due to a high supply in June. This year, the market recovered to a satisfactory season. The Italian fruit is mainly shipped to European markets: Austria, Germany, the UK, Spain, Greece, Croatia and Eastern Europe.
Belgian trader: "Peruvian blueberries are too sour"
Belgian traders are seeing a growing supply from South America. The price for Argentinian berries is declining, partly because of the lower quality and shelf life. Chilean berries yield an average of two Euro more due to their better quality. "The Peruvian production still lies behind and the volumes produced are not as large as expected," explains a trader. "The quality, on the other hand, was quite good, but the taste still leaves much to be desired; it was too sour."
Ninety percent of all South American shipments are packed in 125 gram clamshells. The berries are currently shipped by air. Containers are expected to continue arriving until the end of the year, partly because of the delayed season in Chile. The South African season is going well and large volumes in bulk are already being shipped.
Due to the exchange rate of the Euro, prices in Europe are relatively high for this time of the year. In the premium market, prices reach around 25 Euro per kilo. Chilean berries reach 21.50 Euro and the Argentinian stand at 19 Euro per kilo.
Spanish firms investing in Morocco
Prices are also high in Spain due to the limited supply from South America. The season for Spanish blueberries starts in March. Several strawberry growers are diversifying their crops, thereby increasing the acreage devoted to blueberries. The country has a total of about 2,000 hectares; an acreage which is expected to remain stable for the coming season. Consumption in Spain lags behind the rest of Europe, but there have been signs of growth in recent years. Berries are also becoming increasingly popular in supermarkets.
The largest Spanish growers are investing in cultivation in Morocco to be able to start the season earlier. The Moroccan campaign begins two to three weeks before the Spanish. Through these investments, production in the North African country will increase in the coming years.
Last season, the acreage devoted to soft fruit production in Morocco grew by six percent, yielding a total production of 160,000 tonnes. Of the 4,900 hectares cultivated in the country, ten percent corresponds to blueberries; the rest is planted with strawberries (85%) and raspberries (5%). The bulk of Moroccan exports go to the European market.
Poland, major producer in the EU
The eastern European country is among the largest blueberry producers in the EU; according to Polish figures, it accounts for twenty percent of the European production and three percent of worldwide production. Every year, about 15,000 tonnes are harvested, most of which is exported. The main markets are the United Kingdom, Scandinavia and Germany.
The harvest this year was slightly smaller than in previous years. The dry summer was beneficial to some growers who had suffered from floods in previous years. In the south, however, the drought had a negative impact for some growers.
Australia expands acreage
In Australia, significant investments are being made in the crop. A company reports its plans to have only greenhouse cultivation in a few years. Additionally, a three-year program has been launched to expand the acreage. China offers great potential to increase the export volumes.
Tough market in the U.S.
Over the next two to three weeks, the season will come to its end in Argentina and Uruguay; nevertheless, the United States will remain dependent on these countries in the short term, since the Chilean harvest was delayed by two to four weeks due to the cold weather. The first shipment by sea from Chile is expected for early December; until then, blueberries will arrive by air.
Each week, FreshPlaza and AGF.nl publish an overview of the market situation of a given product in a global context. With these articles we offer a picture of a world market that is getting smaller by globalisation. Next week, we will focus on oranges.