The challenges facing the peak of fresh fruit exports in Chile

Miguel Canala-Echeverría, general manager of the Association of Fruit Exporters of Chile, comments on the preparation of the fruit industry for the cherry and blueberry export season.

The Chilean fruit industry has faced numerous challenges in the last two seasons.

Globally, the pandemic altered the proper functioning of maritime transport logistics, extending product transfer times. Being at the southern end of the globe, Chile was one of the fruit industries hardest hit by the crisis given the distance between the country and its target markets.

“Product of the pandemic, movement restrictions, the lack of drivers, the war in Ukraine, etc. there were a number of elements that came together and created a very difficult season," said Miguel Canala-Echeverría, general manager of the Chilean Association of Fruit Exporters (ASOEX) in an interview with Blueberries Consulting during the Fruittrade event.

The consequences in the fruit sector have been different depending on the crop. While cherries maintain almost exclusive leadership in their markets during the southern hemisphere season, facing minor economic losses; Other crops, such as blueberries, have more competition, so, after the loss of condition of their fruits during the long trips, they received less income for the products shipped. 

Blueberries Consulting spoke with Miguel Canala-Echeverría, general manager of the Association of Fruit Exporters of Chile, about the preparation of the production chain for the coming weeks, when exports of great value and popularity in Chile, such as blueberries and cherries, reach their peak.

How do you evaluate the reaction of logistics providers in view of this season?

Here there is no market problem, rather the market situation was generated as a result of logistical situations; mainly delays and increased costs of the chain. Transit times, for example, doubled and with a perishable, this issue is tremendously sensitive. When the products arrived at their destination, their condition had deteriorated significantly, so their marketing became complex.  

This year we have worked intensively with everyone involved in the logistics chain to be able to take measures to prevent this from happening again. We have had meetings with practically all the actors and I believe that there is absolute agreement on the extraordinary nature of what happened last season, and that we hope that this year it will not be repeated; that everything works fine.

What expectations do you have for the current fruit season?

The season is going well, the fruit is expected to be in good condition. The search Cherry express is setting sail for China, which is sure to carry blueberries and other fruits. A service to the United States also began to operate, therefore the season is already beginning to settle down, and we are confident that everything should operate well. 

The Blueberry Committee reported that they expect a reduction in the export of fresh blueberries. Why do you think this projection is reached?

It is not that production decreases. What is going to happen is that an important part (of blueberries), greater than last year, is going to be frozen. Why is it going to freeze? Because commercial conditions make it more convenient for some producers. With last season's problems, some growers are having financing problems for their operations. 

How do you assess the growth and competition of the Chilean fruit industry with Peruvian production?

Peru has undoubtedly become a very important actor. In fact, there are some producers and agents from Chile who also have production in Peru. Obviously, the productive conditions make them have a good quality product at an opportune moment that is running into Chile in some way. It is an activity that is younger than in Chile, therefore it is perhaps with a technological level or with newer varieties. But we are confident that the companies here are going to be able to recover and return to the market with new impetus to compete hand in hand with Peru.

How should Chilean producers compete with Peru? 

In the end, when you go to a supermarket, why do you choose one and not another (product)? You can choose it because, for example, the packaging is more attractive to you, you had previous experience that that brand was doing well, due to quality, the price. And some more sophisticated consumers may be concerned about other aspects; what are the productive conditions of this, the issue of sustainability, labor issues, the social, the environmental. 

I believe that we are going towards the most sophisticated consumer, in the sense of offering a product that whose production conditions are compatible with the environment and a series of elements that do so, perhaps a product that is the same as the other, but that has a component better environmental. We think the consumer trend is in that line in some more sophisticated markets.

And in that sense, what kind of measures are being promoted to be sustainable?

Here are matters related, for example, to the efficient use of water, the carbon footprint, certifications. There are a number of international certifications that are concerned with measuring, quantifying and certifying this. So there is a whole environment that does it, and therefore we have the mechanisms available so that companies can opt for this type of certification and put it as an added value to what we are marketing.

This season, the cherry will come out, the blueberries will come out. What goals does ASOEX have in market diversification?

We are permanently looking for commercial options. In the case of China for cherries, which has been a single market for this fruit, there are efforts to diversify to India, Vietnam, the United States, Europe and Latin America. We are carrying out promotional activities to alternative markets. We also seek to be able to atomize the offer in China or the United States, entering through different ports to be closer to consumers, contribute to the logistics chain and lower marketing costs.

The effort is not only going to diversify the markets, but also the different ways to get there. For example, a combination called sea-air is being used to export to Asia. We must be one of the few or the only one that has logistics that allows it to carry out an operation that combines the sea with the air, and that also seeks to arrive faster, in a market that is more avid for products and with a better product.

The famous Blueberry Express also appeared, which is a novelty this season, which will leave the port of Coronel; the diversification is also of the shipping ports. 

The market is looking for ways to be more competitive, and that competitiveness is multifactorial. It is not simply looking for an alternative market, but also a way of marketing, transportation, packaging, etc. Of certifications that are more efficient in the chain. 

On the rise in production costs. What measure can be taken as a union to work to reduce them?

Difficult to answer because this is due to market conditions and nobody can regulate it. What we hope is that this cost situation also tends to normalize. In an economy that went from distribution stress, to consumption (...) because during the pandemic consumption curiously increased due to aid plans, and that also generated a rise in factor prices, due to the growth in demand, and on the other hand due to logistical problems that could not supply that demand. 

Those elements that generated this distortion of the costs of the productive factors should tend to be regularized. It is a situation in which the stress of the pandemic is already passing, because at least in Chile everything is quite regular, and we believe that it should happen in all markets. In addition to a slowdown in consumption; All these elements will lead to the cost of inputs tending towards normality.

More information on the blueberry and cherry industries will be available in the next XXV International Seminar Blueberries Consulting 2023. The event, organized by Blueberries Consulting, will take place on April 13 at the Monticello Conference Center, where we bring together union representatives, suppliers and producers from two of the largest fruit industries in Chile. 

To manage tickets or sponsorships write to contacto@blueberriesconsulting.com.

Source
By Catalina Pérez Ruiz - Blueberries Consulting.

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