André van Tuil has been working for Combifrut in Chile, part of the Olympic Food Group, for years. In this interview, he goes into the circumstances surrounding the weather and cultivation in Chile, the current grape, kiwi and top fruit season, the consequences of the current exchange rate for the fruit export, and the importance of Europe and Asia for the Chilean fruit export. "It's clear that Europe is losing import power."
Grapes
Many grapes have already been shipped from Chile now. "Asia has excellent prices for seedless grapes, and if the right quality is shipped, the expectations are also good. The US has been a good market so far, and is now seeing peak arrivals. So the next three weeks it will be interesting, with some pressure on the market," André expects. "The expectations for storage grapes are very good in the US. Europe hasn't received a lot yet from Chile, due to the availability from South Africa. In general, people are reluctant to ship to Europe due to the bad exchange rate, the strict, sometimes impracticable food security demands and the market's sensitivity. I don't expect a lot of pressure for Europe, volume-wise. Hopefully Chile will act wisely, sending the right quality with adjusted volumes. Then the market can offer responsible prices in April and May."
Top fruit/kiwis
When it comes to top fruit, Van Tuil says the season is normal in terms of volume and size. "We're having a normal harvest, and the markets in Asia and Latin America seem good. Europe and the US are coming onto the market later, probably due to the locally high apple and pear stocks. In Chile, quite a lot has been stored in CA cells, so a good marketing strategy can be applied. The kiwi harvest is 25% smaller compared to a normal harvest, but of course a lot higher than last year, when the harvest was cut in half due to the frost. The quality and conditions so far seem better than last year. Here, a good percentage will also be put in CA cooling, and broader distribution is expected worldwide."
Global fruit flows have been changing significantly in recent years. "It's clear that Europe is losing import power, and Russia has also lost some of its shine due to the political situation. Asia keeps developing, but sets high quality demands. They do pay premium prices though. The volume from Chile to Asia is increasing strongly every year, while Latin America is consolidating, showing itself to be an increasingly reliable market. The US is stable and remains one of the most important markets for Chile. Chile benefits a lot from the large number of free trade agreements it has established over the past twenty years, with which it has set up a global distribution network."
Exchange rates
The current exchange rates have a huge impact on fruit export. "The Chilean peso has lost value compared to the dollar, and the Euro has lost a lot of its value. Of course that makes the dollar countries interesting and Europe less so, because the produce becomes about 17% more expensive just because of the exchange rate. The same goes for Russia, which, due to the fallen rouble, also doesn't have the power that used to make Russia an interesting market. So mainly the US, Latin America, and the Middle and Far East benefit."
Floris Jan van Os for Olympic Fruit in a kiwi orchard
Combifrut naturally adjusts its strategy to the international developments, which means the growth is also mainly outside Europe. "As a part of the Olympic Food Group, we try to do as much as we can for the programmes we have as a group with our retail companies and partners, but don't see many opportunities in the spot market this year. The focus is on quality, food safety and presentation," André says. "We assist our growers directly at the source. Trade is becoming more transparent, and tougher. One mistake or error can cost you, so cooperation and chain integration becomes increasingly important. The number of variables in our sector is also big, however, and is increasing rather than decreasing. So the evolution of operating on the global market is unavoidable, if you want to keep doing well for the grower and the customer."
Orchard as base
"The cycle in fruit is long, so long-term partnerships are essential on all accounts. The execution of the strategy requires continuous adjustments and effort. Ultimately it's about everyone in our chain understanding we have a mutual interest. So we, as part of the Olympic Food Group, do everything to guarantee quality, food safety and continuity, and you see the work in the orchard is ultimately the base of everything. It's not a factory, so we invest in the relationship with the grower and integration in production, through which we get more control over the chain. So the structure of the company is mainly oriented to production, packaging and logistics. Over the long term, that should bear fruit. Ultimately it's about everyone involved in the chain getting positive results, in order to keep improving and guaranteeing the continuity of that chain. In the end, all those facets together determine the result. That equation should work out," André concludes.
For more information:
André van Tuil
Combifrut
Raul Labbé #12613 oficina 423
Lo Barnechea
Tel: (56 2) 2869 60 54
Fax: (56 2) 2869 69 54
andre@combifrut.cl