Grapes, cherries, blueberries and stone fruit
Good demand for Chilean fruit
The market is worried about the production of Copiapo. In March, a flood affected about 700 hectares and in July a snowstorm damaged several hectares of table grapes in the upper valley.
"There will be a drop in production, but it won't be as significant as we feared. The valley replants some 500 to 600 hectares of table grapes annually. In addition, all the relevant irrigation problems that the fruit for export had were solved. The orchards affected by the snowfall have recovered partially. The producers from Copiapo will be ok this year," said .
Taaffe believes that Copiapo's production, which normally amounts to 10.5 million cartons, will fall to some 9.5 to 10 million boxes in the 2015-2016 season.
Copiapo's export volumes are relevant because a decline in supply tends to block sales. US supermarkets, Copiapo's main market, devote little space to their offer. This situation is exacerbated when the central zone starts exporting large volumes. Thus, the moderate fall in production provides a less complex marketing scenario than what was feared.
In any case, the demand for the fruits opening the season, such as table grapes, cherries and cranberries, is very strong.
"US consumption of fresh fruit is very active and the retail chains have shown a great interest in these fruits. In addition, demand for fruit in China is growing stronger, despite the stock market problems. An example is the growth of blueberry exports to that market, which have displaced the shipments going to the United States," says Manuel José Alcaíno, president of Decofrut.
Good demand for table grapes
Carlos Seemann Santos, who works at Agricola La Islita and exports table grapes from the Island of Maipo, in the Metropolitan Region, is optimistic about the beginning of the season.
"The recipients of fruit in the United States are very interested in closing programs with us. Demand is so strong that we can only commit to supply half of their requirements. They are very interested in the producer-exporter model because they see that we can achieve a homogeneous good quality," said Seemann.
Chilean producers that attended the PMA fair held in Atlanta, United States, were able to verify the renewed interest of the US demand.
"It's a mixture of economic recovery and government programs promoting a healthy diet. It's a trend that was already happening in previous years, but this year's fruit consumption is even stronger," said Manuel José Alcaíno.
The sale of the best Chilean table grapes in the start of the season for Chilean table grapes is also affected by the Californian stocks of fruit that is similar to last year, reinforcing a decrease from the averages obtained in recent seasons (see graphic) .
Additionally, the Peruvian offer could decrease this season.
"Last year was special for the Peruvians, because the large increase in production was associated with a decrease in fruit quality in northern Peru, which caused a sharp decline in their returns. They may be more cautious in their shipments so there may be a slight improvement in prices in the early season, but it's just speculation. That's why we expect the start of the table grape season will be similar to that of the previous year," said Isabel Quiroz, executive director of iQonsulting.
Blueberries have a clear way
The first lady of the United States, Michelle Obama, is on a crusade to improve the nutrition of her fellow citizens. One of the central points of her battle is to increase the per capita consumption of fruit. Thus, she did not hesitate in sharing her recipe for blueberry cake. The fruit has become the symbol of healthy eating.
Hence, it's no wonder that the demand for Chilean blueberries in that market rises every year. This season is no exception. Additionally, the Argentina's production, which is ready before that of Chile, fell about by 20% because of the frost and hail. As a result, the international market is under supplied and will be happy to receive the Chilean supply.
Moreover, Chinese importers have been very active this season. The United States used to buy nearly 90% of Chilean exports of fresh blueberries. Last year, however that number dropped to less than 80%, mainly due to increased purchases from China. Everything indicates that this phenomenon will be accentuated throughout this campaign, as consumers of that country highly value healthy food products.
In this scenario, the big winners are the producers of blueberries, which should achieve good prices.
Isabel Quiroz spoke about the fear that the high volatility of the climate, El Niño phenomenon, spring and summer rainfalls can causes damages to the production and said that:
-Blueberries grow in cold and rainy weather, so that won't have much of an impact on exports. The producers will manage their crops at the rate of possible rains. The 10 day forecasts are very accurate and producers can program their crops, says the executive.
Stone fruits, affected by China
China has been positive for blueberries, but it is clearly negative for nectarines.
For years, the industry exported white nectarines to that market through Hong Kong. It was the traditional way of doing business in the absence of a specific health agreement for that fruit. In the last season, however, the Chinese government decided to stop any arrival of fruit without sanitary protocol from Hong Kong.
As a result, Chilean exporters had to deliver their fruit in other markets, adding pressure to the sale of all nectarines. Unfortunately, the Chilean supply is not the most preferred by international consumers, as their stone fruits aren't very juicy, and they have maturity and flavor problems.
"This season we are facing a very complex scenario for stone fruits. Latin America, a natural market for smaller sizes, is stagnant. The United States and Europe prefer yellow-fleshed nectarines and not white ones. It will be a very complex market," said Cristián Allendes, of Agricola La Hornilla.
According to the sector, the stone fruit was not affected by the rains in September and October. Thus, the sector projects achieving higher volumes, which would make things more complex.
Producers of stone fruit are very interested in the visit that the inspectors of AQSIQ, the Chinese Health agency, will conduct in late November and early December in the country to give the final approval to the necessary requirements for a health protocol for white nectarine.
Cherries: fears in volume, optimism in sales
The spring rains affected the pollination of the cherry crops. According to Patricio Espinoza, a producer of cherries, there has been a 30% drop in the production of the earliest varieties.
However, Espinoza said he felt very optimistic about the quality of the product, because a lower load per tree tends to improve the fruit's quality.
Further south, the winter frosts have reduced production.
"The cherry orchards are lighter and Chile's production should be lower than last season, even though we have new orchards," said Cristian Tagle, chairman of the Cherries Committee and general manager of the San Francisco Garces exporting firm.
There's been an important adjustment to the projections, because a few months ago estimates were that this season's cherry production would spike to some 30 million boxes, when compared with the 20 million boxes achieved in the 2014-2015 season.
According to Manuel José Alcaíno Chile's production could amount to between 23 and 24 million boxes, if there are no serious weather issues.
Additionally, an important factor in the results is that between 1,000 and 1,500 hectares of cherry trees come into production every year.
There might be different views regarding production, but there is consensus regarding sales.
"China, which is the main market for Chile, demands all of Chile's cherry quality production. Quality is much more important than volumes when defining prices. We can get good returns despite having an increase in production," said Andrés Ruiz, assistant manager of Copefrut.
Meanwhile, Manuel José Alcaíno stated that two US retail chains had were offering cherry purchase programs with a set price this season. This would imply a change of attitude from the supermarkets in that country, who have seen how China buys almost all of the Chilean cherry production.
"China pays higher prices, particularly for the high quality product, but the US can become a very interesting option for the fruit that is not capable of supporting a 35-day trip to China. The experience we had last season was that the fruit that doesn't arrive well in that market is heavily punished in that market. Therefore, the US can help us improve our final results in cherry exports," stated Alcaíno.
Hernán Johnson, of Agricola Sal Luis de Yalqui, added that, despite the threat of rain that can damage the fruit, the processing of cherry in Chile has improved over the years.
"We can achieve a good quality and fruit condition, as selection machines in the packings are now much more sensitive than before. Plus, the orchards have a much finer technological management," says Johnson.
Source: economiaynegocios.cl