The U.S.-Chilean exchange rate, not to mention a host of rising input costs, do not create an ideal environment for trade, but demand for Chilean clementines is so high it probably won’t make much of a difference when shipments are tallied at season’s end.
Input costs are more and more of a burden to exporters and importers of Chilean clementines, said Matt Gordon, Chilean program manager for DNE World Fruit Sales, Fort Pierce, Fla.
“Everything seems to be going up,” he said. “Materials, ocean freight, inland freight. Storage rates are trying to go up.”
Other economic forces are putting up hurdles, as well, he said.
“The exchange rate is not as favorable as they’d like it,” he said.
As a result, some Chilean shippers may supplement their U.S. deals with shipments to other countries, Gordon said.
But it’s unlikely to change clementine volumes shipped to the U.S., which should be similar in 2011 to a typical year.
“The U.S. is the main market,” he said.
David Mixon, senior vice president and chief marketing officer of Seald Sweet International, Vero Beach, Fla., also sees challenges this season related to the exchange rate and high input costs.
“Right now it’s difficult — the exchange rate is far better with Europe than with the U.S.,” he said. “It’s definitely something that’s looked at very hard by many people. You don’t want to get into a situation where you’re competing with yourself.”
The same could be said for input costs, Mixon said.
“It’s huge, without a doubt,” he said. “Whether it’s freight, fuel, inflation, there are going to be many, many factors involved in the market.”
Still, Mixon, like Gordon, said demand for clementines has become so strong in the U.S. that shippers will find a way to overcome those economic hurdles to get fruit to market.