Berries, a dreamed game that the rain left in doubt

24/10/2016

In blueberries, the increase in volume in the US led to a slight decrease in prices. It is expected that they could be slightly lower than last year.

Carlos Ferrer has just participated in the 2016 edition of the PMA, one of the largest events worldwide dedicated to fresh fruits and vegetables, where he was able to learn about the trends and developments in this industry. In the last days, in the USA there was time to go through some supermarkets in Orlando retail chains. What struck him the most, he says, was the demand in the United States for berries and the interest that exists for those Chilean fruits ... As the harvest season in the country is just beginning, there were mostly Peruvian and Argentinean blueberries that were being selling very well and at high prices.

«You can see the interest in supermarkets... They are dedicating a lot of shelf space to berries... The market demand definitely exists. There were all kinds of price ranges; They sold two glasses of 160 grams each and there are six glasses per kilo, that is, they would be around 15 dollars per kilo, up to prices of four dollars per glass, which is equivalent to US$ 24 per kilo., highlights Ferrer.

Adviser of exporters of blueberries, the main berry of embarked in cool of Chile, Ferrer comments that the season looked magnificent in its development, with a very good winter and a better spring that made foresee a very good productive result, what is united to the great expectations in the markets. That, until the last rains put a big question mark about how much fruit was damaged and how much will affect their condition, which will only be known with greater certainty in the coming days.

From the Association of Exporters, its president, Ronald Bown, explained that the heavy rains will have an effect on the early varieties of species that have already started harvesting, such as cherries and blueberries, so it is anticipated that there will be losses, which could be large.

It is repeated once again that a climate event affects production, as is becoming common in recent seasons, in an industry that in the case of berries has prospects of reaching the US $ 2 billion in exports in the next decade, considering that 2015 reached shipments for US $ 843 million, at a growth rate of 11% in the last 10 years.

Consistent return for blueberries

The last report of the Cranberry Committee states that the season started two weeks ahead of the previous one, which is evident in that, until the 40 week, there is an accumulated of 414 tons versus the 101 of 2015 / 2016. The report projects for the 2016 / 2017 campaign an increase of 3% in the exported volumes, and maintains the estimate of more than 94 thousand 200 tons of fresh product. However, the effect of heavy rains, wind and frost in the south central zone has yet to be seen.

«The 2016/17 season is marked by more normal temperatures, a thermal accumulation greater than the average of the last three years and an earlier start. However, this last week has been marked by low temperatures and rain from the central zone to the south that would be delaying the progress of the harvest and phenological states, which could change the advance position that was observed of around 7 to 10 days with respect to of 2015/16. Everything will be defined in the coming weeks depending on the temperatures.", says Andrés Armstrong, general manager of the Cranberry Committee.

The view of other specialists considers that this will not be an easy season.

«They started with good prices, but in the last two weeks the market has been weakening quite a bit, because there began to be much more volume. I think there will be less frozen, because the price will go down. There are huge frozen stocks, which should make there a greater tendency for producers to send more fruit to the fresh market, which they did not do last year. Therefore, there should be a little more fresh volume compared to the previous year, which could negatively affect prices., says Juan Ignacio Allende, general manager of Hortifrut.

In his opinion, the demand will continue to grow.

«That always helps. "I don't think it will be a catastrophic situation, but I wouldn't expect better prices than last year, but rather a little lower, but everything can change due to a weather event."adds Allende.

The consultant Felipe Rosas agrees with the analysis.

«The expected returns for fresh blueberries are not going to be much higher than last season, but they will be consistent; So, the funny thing is that for producers who have already paid the general infrastructure costs, it is the front of a highly profitable crop," concludes the director of Rconsulting Group.

The figure is based on the calculation made for this season of around three dollars a kilo, which discounted the costs would be in a dollar to producer in the case of the fruit that goes to frozen.

What factors are pushing this result? For Rosas, it is important what happened with the fresh blueberry season in the United States and Canada, in which its beginning and its term were advanced, with a production that decreased 4% with respect to the previous year, which was reflected in an increase of prices in the order of 5% to 10% with respect to the 2015 / 2016 season.

«As the season ended early, the starting prices for Argentina, Peru and Chile, which also came early, are 20% higher than last year. All of this sets up a scenario that has several aspects: in the area from Maule to Biobío, given the expectation of higher prices, they will try to export as much fresh fruit as possible, which could produce a deficit of fruit for the industry; in the Biobío area that is not yet free of Lobesia botrana and that cannot export organic blueberries, since they have to be fumigated, which means they lose that condition. Due to the high prices, the organic ones are going to be fumigated and they are going to be exported as conventional to the United States later in the season. This already happened in the previous campaign, but this year it will mean a greater proportion.", says Felipe Rosas.

Rosas talks about the producer trying to take advantage of the high prices, referring to producer returns from 3 to 3,5 dollars per kilo, considering that the normal organic had a return of 7 dollars to producer when there was no lobesia.

«The salvation of the Biobío producer until last year was to sell his organic blueberries for freezing. In fact, last year US$3,80 per kilo was paid, but this year, due to the large harvest of wild blueberries from the eastern United States and Canada that is now coming for three consecutive years, prices collapsed and dragged down the cultivated, and today frozen blueberries, if last year they were worth US$3.300 per ton, are now US$2.100. So, the average price that was paid in the United States per blueberry for the industry is exactly the average of the last 30 years: 90 cents to a dollar per kilo to the producer, while last year in the US they paid US$ 1,60 .2, and a couple of years ago, more than US$ XNUMX», highlights Roses.

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The current question is how long will the export season end? Two years ago 93 reached a thousand tons, in the previous season they were 93.500 ton and in the current one it was started talking about 95 thousand to 100 thousand ton in fresh. After the estimate fell to 95 thousand, but the frost that fell in the first week of September and the second in October in the area of Maule and Biobío make the expectation decrease.

Paulina Campos, manager of the blueberry market of Copefrut, estimates that the frosts of September and early October «the volume would decrease between 10% and 15%, mainly affecting the early varieties of the VI and VII Region. Due to the high temperatures recorded in the central zone during mid-September, the production of early and mid-season varieties is advanced by approximately 10 to 15 days..

imagen3 To that is added that the season was advanced by higher temperature. And a maxim of fruit growing is that if there is advance or delay in the harvest, less is produced. All this leads Rosas to presage that Chile will most likely export 90 a thousand tons or less, that is, between 8% and 10% below last year.

«The good thing is that Chile competes with Chile. Although Peru produces all year round, it does not generate significant volumes, while Argentina ends week 51 or 52, that is, at the end of the year, and work is being done well in the sense that shipments no longer arrive all together., highlights Roses.

Price on the low in raspberries

This season the raspberry could finally pay the consequences, with lower consumption, after prices too high in the last two to three years, according to Antonio Dominguez, partner of Nevada Chile, director of Chilealimentos and president IRO, the world organization of the raspberry. A somewhat larger production is expected, which would reflect a recovery in volume, product of garden renovations, as well as new plantings. The estimates indicate for 2016 / 2017 levels between 40.000 and 45.000 tons.

"The market is reluctant to pay prices as high as last season", highlights Domínguez.

The decline is also due to market issues, such as that the harvests in Serbia -something lower-, and of Poland - much higher-, together with a decrease in the costs of their raw materials have resulted in lower sales prices for the current European season.

"It is estimated that the starting price to producers for raspberries in Chile should not exceed $1.000/kilo, compared to 20 to 25% more than it started last year", points out Antonio Domínguez, who points out that international prices are not yet well defined, because the northern hemisphere's harvest season has just ended and Serbian and Polish exporters are meeting with their traditional customers in Europe. The figure is not excellent as it had been in the last three to four years, but it should work. It will be a lower profitability for the producer, so it will have to improve efficiency and look for better agricultural yields.

However, the entrepreneur says that the prices for IQF raspberry - frozen individual - could reach levels of US $ 3.200 / ton in origin (Europe) and US $ 2.100 for crumble - frozen as cake -. This level is 10% lower than what was achieved last year.

«The United States had a very similar production to last year and an increase in its imports from Mexico and Serbia has been noted, which has driven prices down. The above reveals a new competition for Chile. But, despite that, the sales prices in this market will continue to be higher than the rest of the destinations, except Japan, which also has high prices, due to its quality demands., says Domínguez.

What happened in the USA is that as normal is that you pay more for the local fruit than for the imported one, you notice a greater plantation of blueberries in recent years, given its greater profitability.

Meanwhile, as China has not succeeded in finding suitable places for the cultivation of raspberries, it is estimated that consumption will increase, so that Chilean exporters calculate that, in a not too distant time, China could become a good customer for the processed Chilean raspberries, as has happened with the cranberry.

Yes, in this market are beginning to emerge new actors, such as the cases of Bulgaria and Ukraine, countries with lower production costs than Chile, highlights the president of IRO.

Other realities

The rest of the berries have different projections. In the case of default, overproduction in Europe yielded prices at half of what was achieved last year, with values that went from US $ 2.300 per ton of frozen delinquency to US $ 1.100 today.

In the fresh market, only Colombia, which has 10 1,000 hectares planted and uses it for juice, and Mexico that has 1,000,000 hectares and exports to the United States play.

imagen2 The business that interests Chile is processed blackberries and in this United States it is important, with Oregon as the only state with relevant production. Their current prices are slightly higher than the Chilean ones.

"Blackberries are going to continue with these variations, with rises and falls in prices and even more so, with little differentiation between organic and conventional, because prices are going to be low, in the order of 400 pesos per kilo for producers per frozen product.", says consultant Felipe Rosas.

The price of strawberries in the last three seasons has been of the order of US $ 0,90 per kilo. And Felipe Rosas estimates that it will be repeated again this season.

Of the five million tons of berries produced in the world, the 80% corresponds to strawberries. As a crop they are compared with potatoes, since they quickly allow reacting to market changes.

This is what happened in Chile this season. According to Roses, if the normal thing is that there are between 1.600 and 1.650 hectares cultivated, at least the surface would have grown an additional 200 hectares.

A golden projection

Despite the last two seasons complicated by the climate for the volumes produced of berries, in Chilealimentos expect a rebound in supply due to investments made in the sector.

The long-term look for this activity raises the possibility of reaching US $ 2.000 million in a decade.

«We have limited our projections for the next 10 years, according to the historical parameters of the sector's behavior. According to this, we move in a band equal to 100% of the historical growth, at the top, to one of only 25% of the historical rate, at the bottom. This implies that for this year, Chilean berry exports could fluctuate between US$860 million and US$915 million. For 2017, the figures would be between US$890 million and US$993 million. In a ten-year term, the figures range between US$ 1.100 billion and US$ 2.200 billion. Surely the turnover for Chile will be in the middle range of the projection we have made.", points out Guillermo González, general manager of Chilealimentos, the guild of food processors.

As he explains, the growing trend in exports is supported by the global growth of berries imports, which made the size of the business grow at 2,5 times worldwide, reaching US $ 9.225 million in 2015.

The available figures indicate that Chile is important internationally in exports of fresh cranberry and frozen raspberry. There are still spaces to be developed for more fresh species and many processed products.

«In the latter, it must be taken into account that hundreds of products can be generated from a single species, which is seen more frequently every day in the country's export offer. Infused products - dehydrated with the presence of other fruit juices -, fruit pulp mixtures, juice mixtures, etc. All of this implies a very significant addition of value to what we produce and export, which should be an increasingly present reality in our industry.", concludes González.

Source: Berries Special. The Mercury