Growers of grapes, blueberries, kiwis, apples, avocados, cherries and citrus will be competing with Chile in various export markets across the world, notably The USA, China and some parts of Europe including the Netherlands, according to Colin Fain, of Agronometrics. Cherries and blueberries are growing at the fastest rate in some key markets, but grapes, apples and citrus remain key commodities for large markets such as China. Grape exports have been growing at around 24% over the last three years, and cherries at 47%. The biggest growth has been in blueberries, however sending ‘huge’ volumes from a base of nearly zero in 2011 Mr Fain told the audience at the PMA Fresh Connections A-NZ Conference Day. Mr Fain also broke down exports by commodity and market for a detailed analysis.
Cherries
Apples, cherries and citrus were key commodities discussed, leaving Chile for China, but table grapes and others were still worth considering.
Cherry is a category where there is more competition from Oceania, said Mr Fain. “They’ve been shifting volume away from what’s going to the US towards Asia,” he said of Chilean exporters. Having said that, however shifting prices could still see more attention focused on the Northern Hemisphere for cherries.
Until last year exports over the last five years had been mostly focused on China, according to data presented. This was explained by the seasonal prices in Chile and the US. “This season you can see the price to the US has gone a little higher. Anybody who exports cherries can tell you that cherries are seen as a gift, more than for personal consumption,” Mr Fain explained. “These were really popular before the [Chinese] anti-corruption campaigns, which have cut down on gift giving, especially to government officials.”
Rain right before harvest and a shift in the Chinese New Year were other factors that contributed to a dip in prices and demand. The Chinese New Year did not line up with either the Chilean or Australian export season very well this year.
Blueberries
Chile has been a dominant player in US blueberry exports for a long time, with China seen as an alternative, Mr Fain said. “As other players, Peru, Mexico and Argentina tackle big voids at the beginning of the US season and the end of the Chilean season Chile’s been trying to diversify.”
Quality issues depressed the market for China. “You have to see what the demand growth is and how that’s going to be applied going forward,” Mr Fain cautioned. “It might get a little bit more touch and go, but we’ll have to see. It was a very big harvest that Chile shook this year. Given that there’s less production going forward it might make China more attractive.”
Apples
China still receives a fair amount of apple exports from Chile, however “Chile’s apple export strategy is much more diversified than any other commodity they work with. It’s much more spread out,” Mr Fain told the audience. The majority of sales were Red Delicious and Royal Gala varieties, but Granny Smith was a variety where Chile also had ‘impact’ according to him.
A bumper season for Washington apples will mean a tough year for Chilean apple exports, Mr Fain said. “Europe also had a big season, being put under pressure because of the Russian export loss. Chile really is only able to export to Asia and Latin America. Those Asian prices are a bit more volatile.” In particular Taiwan has received an increase in Chilean apple exports. India is still the biggest destination for Chilean apples, however, according to Mr Fain.
Other crops to consider
Some crops were down in numbers, but the situation could be only temporary. “Grapes were only 15% compared to last year, they lost 124,000 tonnes. Kiwi shipped 53% less than the year before and then plums lost 60%. Mostly because of heavy freezes that happened right south of Santiago,” Mr Fain said.
Other developing economies including South Korea, Taiwan and Brazil are also competition ground for Australian and New Zealand exporters. “As these developing economies become richer they’re starting to take more importance in what type of food they’re consuming. That’s really what’s been driving the export growth from Chile,” Mr Fain explained. Citrus, especially lemons, and grapes are also heavily exported to Japan and South Korea traditionally. Alternatives to lemons and citrus are also being considered for export to China, according to him.
Despite a drop of around 13% in overall export volume, Chile is an important market to understand for context, according to Mr Fain. It has a small population, of just 4.5 million, but huge production meaning ‘everything has to go out’. Being the most developed and stable countries within South America presents an advantage, but production and labour costs are increasing as a result, while in Peru, for example, they remain cheaper, and horticulture is more systematised.
For more information
Colin Fain
Agronometrics
Website: http://www.agronometrics.com