Chile changing - The Packer

Chile changing

07/24/2013 08:45:00 AM
Andy Nelson

Andy NelsonA recent report by the U.S. Department of Agriculture’s Foreign Agricultural Service found that when exchange rate fluctuations and rising input costs are taken into account, the value of Chilean fruit crops has plummeted over the past several years.

Fifty-five percent over the past nine years, to be exact — 16% in 2012 alone.

That decline measures the value of crops to growers when other factors like exchange rate and higher labor costs are added to the equation, FAS officials said.

An official in FAS’s Santiago office told me the challenge for Chilean growers is they’re receiving U.S. dollars, which is low against the peso, for their fruit. Throw in higher labor, water, electricity costs (paid for with higher pesos, of course), and it’s a big problem.

Still, it doesn’t seem to have had much of an effect on overall volumes of Chilean fruit shipped to the U.S. About 705,000 tons of Chilean fruit had been exported to the U.S. in the 2012-13 season through June 11, according to the Chilean Export Association, significantly lower than last year, but officials and importers chalk that up largely to weather.

About 864,000 tons were exported in 2011-12 — up from the 2010-11 total.

Nevertheless, the report piqued my interest, and I did a little more digging. And while it’s true that Chile won’t be turning its back on the U.S. anytime soon, there have been some interesting trends in the market in recent years.

First, on the “up” side, the undisputed champion is Chilean citrus.

I was talking recently to Mayda Sotomayor-Kirk, chief executive officer of Vero Beach, Fla.-based Seald Sweet International, trying to keep up as she updated me on South African, then Chilean, then Peruvian summer citrus deals.

In the back of my mind I was thinking, after I get off the phone with Mayda, I’ve got an interview with someone else to talk about Australian citrus.

Four import summer citrus deals — it’s kind of an amazing thing, when you stop and think about it. But then Mayda reminded me — there aren’t four.

There are five. Seald Sweet is chomping at the bit to dip its toe in the Ecuadorian deal. This is the first year citrus from that country is allowed into the U.S. Pilot-program level volumes should begin arriving for Seald Sweet in August.

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