Chilean grape volumes should be similar to last year - The Packer

Chilean grape volumes should be similar to last year

01/12/2011 10:22:24 AM
Andy Nelson

Harvest in late December in Atacama was focused on perlettes and flames, with some flames experiencing size and cracking problems, according to SimFruit. Superiors and thompson seedless also were being harvested in the region.

Cracking also was reported on some flames in Coquimbo.

Despite the late starts and quality problems in some areas, ASOEX still expected exports to all markets to rise in 2010-11.

About 846,000 tons were expected to be shipped, 6% more than in 2009-10, according to the association.

How much of that winds up in the U.S. could depend on the exchange rate, Leichter said.

“It’s certainly an issue,” he said Jan. 5. “Yesterday the Bank of Chile said it would take measures to strengthen the (dollar relative to the peso).”

In the 2008-09 season, the dollar was worth about 600 pesos, Leichter said. At the beginning of 2011, it was in the 460 range. Pandol’s Sudduth said there were fears in early December that it could go as low as 435.

“Growers are really pushing to get it over 500, and the government said it would take action,” Leichter said. “When all your costs are in pesos, if it’s 460 instead of 600, it can have a significant impact on your financial viability.”

It also makes shippers wonder if they can afford to ship to the U.S., Leichter said, though whether it will have an effect on shipments this year is hard to gauge.

It’s more likely to have a long-term effect, in which growers could not invest as much in grapes and other crops heavily tilted toward U.S. export.

Russia and South Korea are among export markets that have shown big increases in demand for Chilean grapes this season, Leichter said, adding Chile has too much invested in the U.S. market for a significant shift to occur.

“If you have one market that takes 50% of your product, you’re not going to deviate too much from that,” he said.

Uchizono agreed.

“Exchange rates affect the exporter first and foremost,” he said. “It does make suggestions for the exporter to look for other advantages, but the USA is an important market and fruit will continue to come.”

The Chilean government’s intervention at the end of December could wind up paying dividends for the U.S.-bound grape deal, Lewis said.

“The Chilean government bought a lot of U.S. dollars, which has caused the exchange rate to rise to about 500 pesos per dollar,” Lewis said. “That’s not a lot, but more volume may come to the U.S. because of it.”

Other export options, however, remain attractive for Chilean exporters, Lewis said.

“Russia, Korea and India are developing strong ties to Chile, and paying good prices,” he said. “Each will receive more fruit this year.”

Exports also are increasing to Colombia, Ecuador and Brazil, Lewis said.

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