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Chilean Kiwi Committee: production increased by 15% this year

In a conversation with SimFRUIT, Carlos Cruzat, General Manager of the Chilean Kiwi Committee, talked about the Chilean kiwifruit production, strategies to address the target markets and PSA, noting that they need a faster response from the Government to combat it, and avoid the devastation that this disease has caused in New Zealand and Italy.

Currently, Chile is showing an increasing force as a kiwi supplier at an international level. How do you visualize this growth in production and its market penetration, especially in the Asian?

What happens is that the industry is growing in many markets, as a result of the fruit volume. Last year we were more or less stable at 180,000 tons in total, and today considering all the varieties, a little over 205,000 tons.

So we will grow between 10% and 15% this year and we have to distribute that volume in various ways, and that indeed is what we are doing.

So what we are promoting is to grow in Asia. There our Kiwi has great potential, where China is reflecting one of the major volumes, but the problem with China is that, like all markets, the supply chain must be able to absorb the volume of fruit and market it at a good price, because otherwise large volumes are stocked and prices fall. And this is a limitation in any market.

There are markets that are able to absorb supply chains with greater ease, as is the case in Europe and the United States, but a market like the Chinese one, is a market that is just starting to develop the logistic chain, so if they were to handle large volumes it could sometimes prove disastrous.

What about other Asian markets?

This year we have grown 80% in Korea, conquering new markets like E-Mart, which last year left us out as fruit suppliers due to an agreement with Zespri. Currently we have come to have weeks where 70% of Chilean fruit has been on shelves.

In Japan there is also a growing demand for fruit. The only drawback is that Zespri handles 97% of the market in Japan, therefore, it is able to push out the arrival of Chilean fruit, and it is not so attractive since the Japanese market does n´t let you sell comfortably.

What is happening with the U.S. and Europe?

In the case of the United States, exports are rather stable, while in Europe exports have been declining in volume, that is why we look to the Middle East and there are shipments sent there.

Today, we have also been counting in recent years with online services that allow a better distribution to different parts and this is very good support for the distribution of fruit.

Currently, we're trying to improve the global distribution and probably in the coming years maintain a significant volume, reaching close to 200,000 tons.

Now, the European season is starting with about 20% less volume. This causes the season to start well, making it necessary to concentrate the fruit in European markets. Besides, we have to see how the crisis evolves, because if it continues there won´t be very attractive selling prices, nor the ability to take many volumes, such as last year, part of the products go to Latin America, Asia and the United States.

So it is not predictable what will happen but it should be a reasonable season for the departure of the Chilean product but that will depend on how this season behaves, it is too early to say yet. The only thing we can say is that it should stay around 200,000 tons.

As for the drop in the price of the dollar, how is it affecting the industry as such?

As for every fruit exporting company, it is a structural problem that is very serious, along with energy topics, which remain significant, labor issues, which increase the price every day. So competitiveness is low.

We addressed these issues at the recent Kiwi seminar. It was noted that Kiwi competitiveness has declined in the past three years. If before we had a difference of profit per hectare, today all the efficient factors in terms of production volume, cost of structures or prices for sales have fallen sharply. This is due to a fall in selling prices, because of an increase in global volumes of fruit, but also because of depressed markets and an increase in cost structures, since labor, energy and the negative rate increased, on the other hand we are increasingly getting
lower margins that do not allow re-investment in the business, meaning those already in the business to just survive.

And finally, what happens with the PSA?

We need SAG regional authorities, who are capable of doing the corresponding and necessary follow up on orchards, implement measures to contain, control and assess how the disease is appearing. Therefore, we are talking with the Ministry of Agriculture to generate regional resolutions so each province has different characteristics of management, and regional teams of experts and in terms of budget, in order to develop work programs on Psa. And we believe that the Government´s work, in this sense, is overdue.

Source: SimFRUIT

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