Chile’s kiwifruit exports to South Korea up on pre-NZ investigation levels
The Chilean Kiwifruit Committee says shipments to South Korea have not only doubled on last year’s figures, but are 30% higher than they were in 2010 before an investigation of New Zealand marketer Zespri’s anti-competitive behavior.
Zespri was issued a US$375,000 fine in November last year by the Korean Fair Trade Commission (KFTC) for exclusivity contracts that partly barred their Chilean competitors in the East Asian country, through deals signed with E-Mart in 2010 and Lotte Mart in 2011.
Committee manager Carlos Cruzat tells www.freshfruitportal.com Chile has improved its position compared to what it had prior to Zespri’s actions, while New Zealand fruit has also kept a firm place in the market.
“We have recovered the trend we were having in 2010 and for this last season we have seen tremendous growth, which shows we were being compromised by Zespri because if not, we wouldn’t have grown in this way and importers wouldn’t have been interested in placing orders for our fruit,” he says.
“This clearly shows that the Korean market wanted more Chilean fruit and they weren’t taking it because they had a problem. This validates the actions we took last year and the decision by the Korean Fair Trade Commission.
“New Zealand has ceased to occupy all the market space it had due to the pressure it was exerting on supermarkets. With this restoration of balance, they are doing well and we are doing better too.”
The bigger presence of Italian kiwifruit in the European market led many Chilean exporters to move their fruit to other destinations early in the season.
This meant more kiwifruit were sent to Asian destinations such as continental China, as well as Latin American countries – especially Brazil.
“Europe has been decompressing in a permanent way – we have dropped [volumes sent there] in the last four years from 65% to around 55% in the current season.”
He adds Brazil has been a big help in light of the European scenario and shows significant potential for the Chilean kiwifruit industry. The committee met with the South American giant’s biggest retailers in May and June to help boost ties.
He says capturing the Brazilian market is not just about arriving in Sao Paulo, but going through many entry points and getting close to distribution chains.
Around 74% of the country’s total expected kiwifruit shipments have been shipped so far, with an 8.3% year-on-year rise to 195,000 metric tons (MT) expected by the campaign’s end.
In the season to week 29, exports were up 4.9% year-on-year at 144,000MT.
Far East shipments were up 40% year-on-year to that date with 16,566MT, U.S.-bound exports grew 22% to 25,148MT and Latin American shipments increased by 18% to 18,874MT.
Chile’s kiwifruit shipments to Europe were down 5% year-on-year at 77,725MT, while purchases in the Middle East showed the biggest drop, falling 15% to 6,409MT.
Cruzat says the high levels of stock led to initial fears this year would be a difficult season similar to 2010, but the season has been “better than expected”.
“Fortunately, it has been a season trending higher than normal, thanks to the strategy of exporters to open towards other markets and not put the European market under heavy pressure.
“In another scenario it could have been very tight in the rotation of volumes but it is working fairly normally, and with a better expectation than what there was initially. It will not be a spectacular season but well managed.
This doesn’t mean the challenges will go away. Cruzat emphasizes that in the season’s early stages there were exporters shipping unripe fruit.
“There are exporters who are sending fruit that is below or at the required limit and the only thing they do is damage the market. There are always people who want to do business and don’t see what long-term business means.
He says it is important to continue improving the quality of fruit on arrival and to understand the different cultures of every destination market.
“This year we started a program of ripening fruit on arrival and there are many exporters implementing programs in Europe, Canada, Korea and Brazil.
“It is part of the protocol we are proposing and it has worked pretty well. It doesn’t apply to all markets or channels but it enables us to supply a product that is closer to final consumption.
“This is what will yield us returns in the medium and long term.”
Related stories: Chile: earning space in the South Korean kiwifruit market