Argentina: Cherry season off to good start

Several reports predict positive scenarios for this seasons international trade of cherries in the southern hemisphere.

Despite having a low impact on overall exports, Argentina's offer has the same expectations.

"We expect strong prices and good returns for all our exports," confided a producer from Neuquén. 

The relevant fact is that there were no decreases in the region's harvest.

A tour of the various facilities in the region has allowed producers to estimate this season's production will amount to nearly 3,200 tons. The figure reflects a significant leap over the previous year, although it is clear that the 2013/2014 season was atypical in volume due to the damage caused by the frost in late 2013.

According to the private sector, the Black River Valley and Neuquén will export more than 2,000 tonnes of cherries this season. Most of this volume corresponds to medium and large sized companies.

No doubt this year the outlook is different. However, exporters have warned that there are still some weeks remaining before the harvest comes to an end. "The wind and rain are two key factors at this time of year," said one regional exporter in a telephone conversation with the press.

He said the strong winds that occur in the area by the end of spring and early summer can affect the volume (by pulling down the fruit) and crop quality (as they hit the cherries). On Thursday and Friday, gusts of up to 90 mph affected the local region. So far there is no information on the possible damages these winds had on the fruit being harvested.
 
At this stage, the rain also has an impact on the product. Strong humidity generates a physiological disorder called cracking, which is characterized by a crack or parting of the outer layer of the fruit's skin and generally occurs in the area around the stalk, where water is readily accumulated, but it can also occur in other areas.

In short, the regional business is always worried until their product reaches the source port and is ready for export. "Only then can we breathe, but we're not relaxed, because the commercial side has its own problems," said the source.




Demand
The demand for cherries this season is expected to have firm prices, especially in the Asian markets.

Traditionally the European Union and the United States achieve very good quotes in the window that goes from week 48 to week 52.

The Argentine domestic market's demand for cherries is expected to be good until the first few weeks of next year. The industry is concerned about the effect that the country's recession and the high prices needed to offset the production's high costs will have on the campaign's evolution in the local market starting January.

Currently, the region's retail market is selling cherries at 70 pesos per kilo, although prices are expected to fall as the season progresses.

International markets
According to a recent study released by the United States Department of Agriculture (USDA), worldwide cherry production for the 2014/2015 season is estimated at 2.41 million tons, 1.5% more than in the previous period. Estimates are that international exports of the cherry will increase 8%. 

The statistics indicate there is a significant increase in the production of China and Chile this season (see Asoex's chart for more information) that will offset the harvest reductions in the European Union and the United States. In order of importance, the EU expects its harvest will amount to 675,000 tons, with losses of 4% over the 2013/2014 season; Turkey, the second largest producer of the world, estimates its harvest will amount to nearly 500,000 tons, similar to the previous year; United States will harvest 395,000 tons, -2%; China's production is expected to amount to 220,000 tons, 22% more than in the previous year; Ukraine has no changes in its bid, with 220,000 tons, and Chile plans to harvest about 110,000 tons of cherries, nearly 28% more than in the 2013/2014 season.

Regard the domestic consumption of fresh cherries in different markets, the USDA noted that both the EU and the US are expected to have a slight retraction. At the other end of the statistical picture is China, where this year's consumption is expected to amount to nearly 265,000 tons, 24% more than in the previous year.
 
Russia's domestic consumption of cherries is expected to be similar to last season, i.e. about 150,000 tons. The Eurasian giant is the world's largest importer of this type of product. Thus, Russia is expected to purchases 80,000 tons of cherries this year.

The cherry harvest in the EU, the largest producer in the world, was affected by frost and severe hailstorm at harvest, especially in Italy and Poland. Forecasts are that exports will fall by 30%, just over 30,000 tons, largely because of the lower demand caused by the Russian veto on EU products.

The USDA also stated that the provinces of Shandong and Liaoning were key to China's production. Consumption is expected to exceed production for the sixth consecutive year. Therefore, imports are expected to reach a record high of 50,000 tons this period. Currently, China imports most of its cherries from California, although Chile has begun to position itself firmly in this important destination.

US production will fall again, as the production of sweet cherries in California and Michigan fell slightly to 395,000 tons. Exports of fresh cherries are expected to be 33% higher than the 89,000 tons in the expansion of demand in Canada, China and other Asian countries. Imports remain unchanged at 10,000 tons.




Source: rionegro.com.ar


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