Chile is not about to forget importance of UK fruit buyers
Some 25-30% of Chilean fruit exports are still sent to EU countries

Chile is not about to forget importance of UK fruit buyers

Héctor Riazuelo

Fedefruta - Juan Carolus Brown
Juan Carolus Brown, Fedefruta president


Driven by the strength of the US dollar against local currency and increased access to international markets, Chile is looking to consolidate its position as one of the southern hemisphere’s leading fruit exporters. Produce Business UK finds out more about the plans to resume investment and the significance of export market expansion from the president of Chile’s fruit producers’ federation (Fedefruta), Juan Carolus Brown

Without venturing to give specific figures on the impact that El Niño could have on the coming season, Brown is optimistic about the prospects for the fruit sector in Chile.

For example, the cherry campaign, which began last month is expected to produce similar volumes to last season since – although the quantity of fruit on individual trees is lower and therefore yields per hectare are down – new orchards are coming on stream, which will help to maintain overall crop volumes.

Foreign exchange sets the pace

As far as the US dollar-Chilean peso exchange rate is concerned, Brown explains that from June to November alone, the Chilean peso has depreciated by 8% from CLP650 (60p) to CLP710 (66p).

“The sector does not change because of the dollar and we have to export just the same,” he explains. “However, it does exert an influence over investment and reconversion in the fields.”

And it’s this scenario – earning more pesos for exported produce – that translates into an opportunity for greater competitiveness.

“It’s like a city where you need to keep fixing the roads,” says Fedefruta’s president. “There are some investments that are postponed, for example in irrigation systems. But most important is modernisation and investment in different varieties.”

Similar views are expressed by Jorge Valenzuela Trebilcock, president of the Nurseries Association of Chile (AGV). “After having had the dollar below CLP500 [46p] a couple of years ago, the fruit export sector now has the opportunity to resume investments that can’t wait any longer, such as renewing obsolete orchards, which because of the age of their plant material, are no longer competitive in terms of yields or quality,” explains Valenzuela.

This is a situation that Fruséptima – the association that represents growers in the Maule region – and Fedefruta calculate has meant 40% of the acreage dedicated to apple production in Chile is no longer competitive because orchards are older than 20-25 years.

Furthermore, Valenzuela adds that an unfavourable dollar exchange rate, and the consequent lack of renewal in plantings, has led to a 30% drop in the competitiveness of Chilean table grapes in the past decade and a fall of 22% in apple exports during the first half of the year.

Market expansion at the expense of the EU?

On the other hand, Chile continues to seek out new markets, with Brown highlighting the free trade agreements that the South American nation holds with more than 60 countries.

In addition, the recent signing of the Trans-Pacific Partnership (TPP) looks like another route to strengthen Chile’s exports. The TPP includes the US and Japan plus 10 further Pacific Rim countries. As well as Chile, other Latin American signatories include Mexico and Peru.

Although the US and Canada combined remain Chile’s largest fruit export markets – taking over 818,000 tonnes in 2014/15 – Asian markets are gaining ground and accounted for nearly 430,000t last season, according to Asoex figures. Compared with 2010/11, this represents a 10% drop in sendings to North America and a 25% increase in exports to Asia. The European market, which not so long ago was almost on a par with the US market, has seen its arrivals decline from more than 717,000t in 2010/11 to just 564,000t last season.

Indeed, Asian markets have evolved to become hugely important for Chile’s fruit trade – China alone accounts for 75% of sales of Chile’s cherry crop.

Against this backdrop of diversification and influenced by the high cost of the US dollar, traditional markets for Chilean fruit exports such as the UK and rest of the European Union (EU) do not appear so attractive these days.

Nevertheless, Brown says while the UK and wider European market might have lost ground in terms of volume, he says some 25-30% of Chilean fruit exports are still sent to the EU.

And regardless of the prevailing situation, he emphasises that these are markets that Chilean fruit suppliers are not going to neglect. “Other suppliers will step in and then they [the EU] won’t take from us anymore,” he stresses, highlighting the particular importance of the UK as a market, especially for Chilean table grapes.

Shifting labour panorama

Meanwhile, as far as problems with Chilean port strikes and other labour issues are concerned, Brown is cautiously optimistic. Industrial action has affected the sector in the past, however with low prices for copper – Chile’s traditional export mainstay – the mining industry has experienced a slow down and the knock-on effect has been an increase in availability of labour for the fruit sector.

So while the UK may not be as large a player as it once was for the southern hemisphere’s largest fruit exporting nation, its producers and suppliers know all too well they should disregard it at their peril.


Read the other articles in PBUK’s Sourcing Spotlight on Chile:

The UK remains an important market for Chilean fruit

Blueberries from Chile looks for convenient boost in UK

Chilean kiwifruit breeding programme looks to supplement Hayward strength

Chilean walnuts and prunes have UK niches in sight

Chilean vegetable association seeks long-term UK trade deals

Gesex to offer varietal and quality improvements for UK buyers

Chile’s grape sector looks to expanded UK future with fresh varieties

Northern Chile looks to water conservation to beat drought 



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