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Argentinian fresh and dried fruit exports continue to drop

Producers in Mendoza, Argentina, are deeply affected by the lack of competitiveness, and although prospects for the next harvest season are positive, they assure that without a change in macroeconomic policies they are doomed to disappear.

The situation affects the province's various productive sectors differently. Those who have to sell their products overseas have a difficult situation ahead, which is the case of stonefruit and top fruit growers. 

Juan Riveira, president of the Association of Producers and Exporters of Fresh Fruit of Mendoza, said they are concerned because local production costs are higher than those of their competitors. 

"We are having difficulties because our costs are higher than Chile's, for example in the cases of stonefruit and pears," he said. Riveira explained that, overall, a box of pears in Chile costs 14 dollars to produce, while in Mendoza it costs 20. "They sell at cheaper prices and thus they win." 

A report of the Food Products Coordinator (Copal) showed alarming figures about the decline in exports for the country's regional economies. For example, the sale of pears and apples decreased by around 10% in the first eight months of 2014 compared to the same period in 2015. 

Mario Leiva, president of the Rural Society of Valle de Uco, said the situation for fruit producers largely depends on Brazil. "The problem we are facing is that it is expensive for us to reach Brazil, and although our peaches are better and tastier, they are too expensive," he stated.

Another issue is that export duties need to be paid on each fruit box sold overseas. According to Leiva, this tariff ends up representing 25% of the final cost.

"The Government only reimburses us 5%, and if they increased it to 15% it would not have an impact on the nation's revenue, but it would be very significant for us," added Riveira. 

Loss of profitability
"At the moment, many growers are losing profitability, and that leads them to sell their land. It would be desirable for them not to do so, as the advance of urban areas at the expense of cultivated lands is increasing," stated Sebastián Riera, economist at the Association of Winemaking Cooperatives of Argentina (Acovi).

According to Riveira, much of the fruit sector in the Uco Valley has been replaced by vineyards in the last decade. "Many had to sell, and the purchasers planted vines," he explained. "Many growers are leaving the market. I have seen five year old fruit trees being pulled up; do you know how sad that is?" says Mario Leiva. 

"Price levels are not down to us. If certain macroeconomic patterns do not change, the situation for us will only get worse."

So far, it all points to a good harvest this year 
Producers agreed that a good stonefruit harvest is expected this year, provided that no frosts or hailstorms take place. 

"It all points to a good harvest, but we need to get there with the highest quality possible, because if supply volumes are greater there will be issues with prices for the lower quality fruit," said Juan Riveira, of the Association of Producers and Exporters of Fresh Fruit. In this regard, he said they are worried about the possible lack of labourers. "Those working will earn a good salary of at least 250 pesos per day," he affirmed.


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