Chile will produce 236,666 tons of cured and sausage meat this year, according to the National Association of Sausage Meat Industries (ANIC). This represents some US$500m in sales and a 7% volume increase compared to 1999.

 However, profitability in the sector has decreased in recent years, said ANIC general manager Osvaldo Munoz, because the 1998-9 recession forced producers to reduce prices in order to maintain demand.

 Most Chilean sausage meat production is aimed at the domestic market. The export market remains relatively insignificant due to the difficulty of transporting perishables, compounded by limited demand for traditional products. The solution, Munoz said, is to diversify product ranges and establish foreign production plants.

 In October, the sausage producing company Cecinas Llanquihue announced plans to export to Argentina. The company sees potential in this market because annual per capita consumption of cured and sausage meat is only 7 kilos in Argentina, compared to 15 kilos per year in Chile.

 Chilean producers are also feeling the effects of increased competition from cheap imports from the European Community (EU), especially Spain.  The sector has expressed concerns that the EU products are subsidized.

By Steve Anderson, correspondent