Samuel Escalante: "There is a powerful space for the early production of cherries in Chile"

The director of Viveros El Tambo spoke with Blueberries Consulting about the future of cherries, the most valuable fruit crop produced in Chile.

Chile's market share in the cherry crop in the southern hemisphere is indisputable. During the 2021/2022 campaign, it managed to export 95,7% of the fruit produced to the south of Ecuador, sending 356.305 tons according to data from Iqonsulting.

"Chile's production is very large and it still has the inertia to continue growing," Samuel Escalante, director of Viveros El Tambo Chile y Perú, told Blueberries Consulting during the Fruittrade event of the Association of Nurseries of Chile.

Since 2017, Chilean cherry exports have grown exponentially according to information from the Office of Agrarian Studies and Policies (Odepa). The biggest year-on-year difference is between 2020 and 2021, when tons shipped abroad increased by 44,75% after China partially reopened due to the Covid-19 pandemic.

The fruit is popular during the Chinese New Year celebration as it symbolizes perfection, eternity, fortune and prosperity in oriental culture, being highly demanded by the upper-middle class as an elite good. The strong consumption of the cherry during this holiday produces a peak in the price of the commodity, which is not even affected by the large volume exported to this country: 313.961 tons during 2021/2022.

The harvest of the most planted varieties of cherry in Chile; Lapins, Santina, Regina and Bing, begins after the second week of November, just in time to arrive in China during the New Year celebration, which in 2023 will be earlier than normal: January 22.

According to Escalante, a nurseryman of various licensed cherry varieties, the focus of plant producers now is to expand the offer of early harvest cultivars. These are the sales made in China between week 43 and 45, the period in which most of the cherries are beginning to be harvested in Chile, where the highest price per kilo is reached, which can reach 50 dollars during the middle of the week 43 (2021 data, Iqonsulting).

“It is true that cherry tree plantations contracted more noticeably, because the cherries that arrive after the Chinese New Year drop a lot in price. But in the early part there is a powerful space, it is an area that will surely become saturated over time, but for that it is lacking”, the nurseryman opined.

The high price of early varieties can be explained by the low supply present during that time of the year. Although it may represent an attractive window for the Chilean industry, its price could be affected if exported volumes increase drastically.

Monomarket

87,8% of the Chilean cherry harvested between January and October 2022 has been sent to China. During the 2017 season, average prices of USD 10 per kilo could be observed. In 2021, this dropped to $7,6.

“Now that it has tightened, people are looking for (new markets), but if before we were 95% for China, now we are close to 90%,” Escalante said. The nurseryman indicated that he expects the trend to continue over time and China's participation to be reduced due to a greater entry of Chilean cherries into the US and Europe, where "the prices are no longer so extraordinary, but they are going to be good." ”.

“Being dependent on a single market is something that obviously makes you very fickle. But China will continue to be the great giant where you can eat that amount of Chilean fruit”, he adds.

The new scenario of lower prices per kilo in China, and the even lower prices in other markets such as Europe and the US, imposes a new dilemma for producers: they must adapt their finances to be sustainable, receiving lower net profits.

Samuel Escalante does not believe it is possible to reduce production costs: "Fertilizers go up, labor goes up... Obviously you can be more efficient, and there is no doubt that as things get tighter, people move on and achieve things."

The director of Viveros El Tambo believes that the market will adjust on its own, flattening the growth curve of cherry exports to China in the high season, while early varieties may experience a significant rise in the next 3 to 4 years. . 

“I am a nurseryman and it is convenient for me that the guys continue planting and planting. But it must stop. And that is not due to planning, but because the market opportunities are reduced, the volumes begin to be antagonistic to one, ”he concludes.

For more information on the state of the cherry industry in Chile, we invite you to attend the International Seminar Blueberries Consulting 2023, next April 13 at the Monticello Conference Center. During the event, high-level technical-commercial talks will take place in two rooms, each one dedicated exclusively to blueberries and cherries. In addition, there will be a common room where suppliers, producers and leaders of two of the most important fruit industries in the country will be able to enjoy various networking activities.

Source
By Catalina Pérez Ruiz - Blueberries Consulting.

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