Fedefruta Leader Says Fruit Sector Stalled

Poor weather and tough market conditions in Europe made the 1999/2000 season an especially tough one for Chile's fresh fruit growers, said Luis Schmidt, president of the growers federation, Fedefruta, at the organisation's annual meeting 7 September in Santiago.

Total export volumes fell by 3% to 1.5 million tons compared to 1998/1999, while sales tallied roughly the same as the previous season, or US$1.4bn.

Although table grape, kiwifruit, clementine and cherry exports all increased strongly last season, volumes of apples, pears, avocados and stonefuit fell sharply.

The 10 percent increase in fresh fruit exports to North American markets was countered by a 10% drop in volumes shipped to Europe and Latin America.

Speaking to more than 400 leading growers from across the country, Schmidt said that while last year's rainy weather contributed to the poor results in 1999/2000, other factors like high interest rates, a poor peso to dollar exchange rate and inadequate port and water infrastructure were also to blame.

"Growth in this industry has been really depressed since 1996," Schmidt said. "We have been stalled the past four seasons in terms of the land mass that has been planted, the volumes exported and the total amount of sales."

Schmidt emphasized to growers that increased competition from South Africa, New Zealand, India, Australia, Brazil and Argentina means Chile must differentiate itself by exporting only top quality fruit and by assuring rigorous health safety and environmental standards.

Schmidt urged growers to invest more in making their operations more efficient and set an export goal of US$2.5bn by the end of the decade from a total planted area of 720,000 acres, compared to today's 504,000 acres.

Helping meet that tall order will be the recent positive change in the peso to dollar exchange rate. The dollar's value has increased by more than 10% in the past six months (from 500 pesos to the dollar to 550 pesos to the dollar), and many analysts believe it could go as high as 600 pesos to the dollar.

Since growers pay most of their bills in pesos, but receive dollars for their sales, the enhanced exchange rate means more money in their pockets.