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China breaks into the Brazilian pear market

Uncertainty is growing among Argentinian top fruit producers.
Exports to Brazil from the Rio Negro Valley and Neuquen are not only reeling from the recent interceptions of carpocapsa at the border but also from two other factors that are as, or more, worrying than the fight against the plague.

The first of these is the loss of exchange rate competitiveness that Argentine fruit is suffering in the Brazilian market. Official data details that Brazil has devalued its currency in the last six months by nearly 8%. Inflation in this same period was around 2.20%, thus the competitive improvement for Brazilian production in the period under analysis stood at around 6%. This is the opposite for entrepreneurs in the Valley: with a 25% inflation in recent months the parity moved only slightly more than 3%, which generates a significant loss of competitiveness. This foreign exchange scenario will undoubtedly be felt in the Brazilian market during the season that has just begun.

The other factor of concern is the entry of the Chinese pear to Brazil as of March. The Asian giant has had a record harvest of pears this season. According to data provided by the United States Department of Agriculture (USDA), this year's production exceeded 17 million tons, a volume 20% higher than in the previous year and equivalent to almost 20 pear harvests from the Valley of Rio Negro and Neuquen. In addition, Russia has closed off its imports and this further complicates the situation for Chinese exporters.

China's need to increase its exports is visible, and Brazil is still an important market with more than 100 million potential consumers. USDA projections show that China hopes to place more than 500,000 tons of pears worldwide this season, i.e. about 40% more than in the 2018/2019 season.

It should be noted, as a comparative exercise, that Argentina has exported nearly 300,000 tons of pears throughout the past year and a third of this volume went to the Brazilian market. Brazil is a very important market for Argentine pears as they account for 80% of all the top fruits that the country sends to this destination.



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