A smallholder Chilean apple producer-exporter is confident of a good season this year despite the abundance of fruit in parts of the Northern Hemisphere, as well as frosts that wiped out around of quarter of its crop.

Exportadora Montilla production manager Joaquin Aguilar Encina

Exportadora Montilla has two orchards covering some 34 hectares in Chile's southern VII (Maule) region, principally with Royal Galas and also some Granny Smiths. One orchard is in Molina and the other is in Rio Claro.

The company's father and son owners - Joaquin Aguilar Sanchez and Joaquin Aguilar Encina respectively - first began exporting their fruit five years ago, following initial financial support from ProChile to attend various international trade fairs and make industry contacts.

"We didn't really begin exporting to grow the business - it was almost entirely out of necessity. We realized that if we didn't take the risk of exporting directly our business would not be profitable enough to continue," production manager Encina said.

"Often when you have small volumes it can be really hard for the business to be profitable. The apple business is one of volumes. But as we're not a large company we had to take the risk of exporting and travelling, with the help of ProChile."

Encina said frosts earlier in the season had damaged around half the crop on the Molina orchard, while the Rio Claro orchard was unaffected, meaning the company's total production would only be at around three-quarters of normal levels. Most of the damage was taken by Royal Galas.

The production manager said he was able to protect against frost to a certain extent using basic orchard management like the application of irrigation water when frosts set in, but the cost of more technological equipment such as fans was simply too high for a small operation.

Small company advantages

While half of the crop is usually shipped to China and the rest split up between Colombia, Brazil and Spain, Encina said increased volumes could be sent to China this year due to a larger fruit sizing, which he said was generally preferred by consumers in the Asian country.

Conversely, no containers will be shipped to Europe this campaign due to ongoing oversupply issues, partly stemming from Russia's ban on EU food imports.

Asked whether the bumper U.S. apple crop and shipping delays caused by the West Coast port labor negotiations could pose a problem for Exportadora Montilla in the Chinese market, Encina said he hoped the freshness and consistency of his crop would allay any troubles.

"There are some clients in China who are delaying their orders a bit, but it doesn't concern us too much as we know that the fruit from the U.S. will have already spent eight months in storage," he said.

"Our fruit is fresh, it was just harvested two weeks ago. So that's something that benefits us, and it means that we shouldn't be too impeded. Our advantage is that we can control the quality really well - this is something very important because quality is essential in China, and so we're not interested in buying more fruit from other producers because it's not always going to be consistent.

"We're confident this year will be good, despite all the difficulties there are in the Northern Hemisphere. The advantage of not being a big company is that it's easier to find places for the fruit - you can wait a bit, and sell it well."

He added he wasn't expecting prices to be particularly good this campaign, but they should not be so low as to cause any major problems.

Exportadora Montilla's fruit is distributed in China through Lantao, and the company also has deals with the Colombian supermarket chain Exito. For Brazil, apples are sent to the region of Paraná where they are sold in the Muffato supermarket chain.

"Brazil is a big market for Chilean apples. They're buying lots of fruit, especially Granny Smith, and ours all go to Brazil via truck directly from the packhouse to the supermarkets," Encina said.

"The fruit takes about nine days to arrive, so it gets there fresh and without and problems. We're continuing to develop our business with the supermarkets."

Cherries to complement apples in China

The Chinese market was temporarily closed to Chilean producers last season following detections of Neofabraea alba - the cause of lenticel rot in the apples - and so Exportadora Montilla was not able to ship any volumes over.

This season however, the first container left the port of San Antonio on the weekend bound for Guangzhou.

Encina said he was also hoping to take advantage of the trend among Chinese consumers of buying fruit online by planting around 10 hectares of cherry trees to complement the apples in China.

"The customers who buy fruit online normally look at other fruit as well, which is more interesting for them, and cherries complement apples very well due to the harvest dates and labor requirements," he said.

"Cherries are harvested around November and December, and in February or March the apples come, so those two fruit would go together well."

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