Last week, businessmen and producers were in Buenos Aires trying to get funds to get through the season. On Thursday, they returned empty handed after leaving a counteroffer with numerous demands at the Ministry of Agriculture's Office. Limited funds, credit at subsidized rates, and some compensation on asymmetries that exist today with the Russian market.
After the failures of these meetings, a lot of the fruit in the fields won't be collected.
At the start of this week the Williams pear will be ready for harvest, but many producers don't have the bins they need to start the harvest.
Even the prices paid by companies aren't high enough to offset production costs. Some exporting firms said they would pay $0.20 per batch or $0.26 to pass through a machine (and after a normal discard it's the same as the first offer). The rest of the companies are silent.
The Fruit Contract Bureau had set the minimum average price for pears and apples at 32 cents for the 2014/2015 season. The amount was established following a methodological study by the National Institute of Agricultural Technology (INTA) Alto Valle. Thus, there is a difference of $0.12 per kilo between the cost of production and the sale value of the product.
Meanwhile, the exporting companies stated they can't buy fruit from third parties if they have nowhere to sell it. The Russian market's deteriorated economy and the drawbacks in Europe when place the fruit, condition about 70% of the trade that the Valley sends overseas.
"We will continue paying our farmers as long as we can, but we must be honest and clarify that we can't buy all the fruit," said a top executive belonging to an exporting firm.
Farmers will start collecting more than 415,000 tons of Williams pear this Monday 19. However, in the current situation, less than half of this fruit can be harvested because half of Williams is in the hands of exporters and the rest in the farms of the producers.
In these first weeks, some lots may be placed in Brazil and the United States, two markets that haven't shown any serious trouble selling fruit so far. But that's only a small part of what the Valley historically moves at this time of year.
The season will also be hard to overcome for the exporters. Apart from the problems of placing their products abroad, they are being limited internally. Given the insensitivity of the national and provincial governments, the producers might protest and prevent the fruit from being taken out of the packing facilities. Additionally, starting this Monday, the workers, which are claiming for wage improvements, will start to block the region's Customs facilities, thus preventing the commercial flow of pears.
In short, the season starts with many problems.
Source: Diario Rio Negro