Chile could double or triple fruit shipments to Indonesia

Chile's fruit sector has good prospects thanks to the recently signed comprehensive economic partnership agreement (CEPA) between Chile and Indonesia. "Our prospects are really good. We could double or triple our shipments to Indonesia in the short term," stated the president of Fedefruta, Luis Schmidt, who said the agreement still had to be approved in both countries.

During the 2016-2017 season, Chile exported 8,649 tons of fresh fruits to Indonesia, i.e. 81.94% more than in the 2015-2016 season. This volume would increase thanks to the decrease in tariffs caused by the agreement.

"In the medium term nearly 90 percent of the Chilean products will enter duty-free to Indonesia, and that is a huge advantage," said the Director general of Direcon, Paulina Nazal.

Currently, the majority of Chilean fresh fruits that enter Indonesia are subject to a 5% tariff, with the exception of clementines and mandarins, which pay a 20% tariff. "We hope that the agreement will improve the competitive position of the fruit, thanks to the decrease in tariffs," said Ronald Bown, the President of Asoex.

Grape exports to Indonesia
Table grapes lead Chile's fresh fruit exports to Indonesia, as they account for 93% of the total. According to Decofrut, Chile annually exports nearly one million boxes of grape - 8 thousand tons in average-, 360 tons of kiwis, and 100 tons of pears to Indonesia, stated Manuel Jose Alcaino, the director of Decofrut.

In fact, in 2017, without the agreement, exports of Red Globe increased. "We went form 6.5 million to 13.3 million dollars in this variety. This was done before the CEPA," said Luis Schmidt, the President of Fedefruta.

This market is attractive because producers will be able to send it fruit that for various reasons, doesn't qualify for other markets, stated Cristian Urban, the commercial Manager of Frutera Santa Maria, a company that exports Red Globe and is now performing tests with the Inia Grape One.

The President of Frutamerica (which only exports grapes to Indonesia), Guillermo Irarrazaval, said that the recent agreement was important for the grapes. "It will allow us to better compete against Australia - which today has lower costs - and against Peru."

Return to Jakarta
Even though there still are some health protocols to be resolved, the CEPA will help exporters regulate the other markets to which Chile exports large amount of fruit. "China is receiving almost 85% of our cherry production. We can also export to Indonesia. We hope the parliaments will approve the agreement quickly," said Schmidt.

Indonesia is implementing new food health and safety provisions, which could have an effects on our exports, stated Ronald Bown.

In fact, one of the current difficulties for trade with that country is that the entry of Chilean fruits through the port of Jakarta has been forbidden for nearly six years, so exporters are forced to ship their products to Surabaya and Belawan, which are more than 1,000 km away from the main fruit marketing centers.

"This affects the competitiveness of our products, given the higher cost of logistic transportation and storage, and the fruit's condition, as it takes it longer to reach its destination," stated the President of Asoex.

The port of Jakarta banned the entry of Chilean fruits because they found that the fruit products entering by Jakarta had fruit flies. "We are a country that is free of the fruit fly and we have been making progress. In fact, authorities are considering authorizing us to use the port of Jakarta again," said Luis Schmidt. He also said they were very interested in using this port, as it provides access to more than 150 million people.

Source: El Mercurio

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