Argentine pome fruit industry battered by hail, strikes and inflation

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Argentine pome fruit industry battered by hail, strikes and inflation

Argentina's key pear and apple province of Rio Negro was hit by several hailstorms between November and February, but gathering crop information proved difficult. During Fruit Logistica in Berlin the Integrated Argentine Fruit Growers Chamber (CAFI) gave a set of forecasts to the World Apple Producers Association (WAPA), but it was clear for both parties the figures would need revision. At we take a look at why the South American country is set for a 17% fall in production, the non-weather factors causing headaches for growers and a few positives when it comes to quality and demand.

Argentina accounts for more than half the Southern Hemisphere's pear production, so when its growing heartland is damaged by hail the ripples can be felt across the global supply chain.

WAPA's latest update shows Argentina's pear production is set to fall to 697,000MT, while apple production is expected to drop at the same rate to 869,000MT. This leads to Southern Hemisphere production falls of 10% and 3% for the two fruits respectively.

Luckily for Europe there are still very strong pome fruit stocks available.

WAPA deputy secretary general Raquel Izquierdo de Santiago, tells the hail damage, which covered surface areas of different farms in the area at rates of up to 80%, may ease European supply pressures.

"The impact will still have to be seen but this year the crop in the European Union has been more stable compared to the previous season, so in a way the market might remain stable," she says.

"Of course, with Argentina in terms of returns this is obviously going to have a big impact."

Weather, financial and social challenges

CAFI manager Daniel Satragni says the industry is not just "very worried" about the estimated 7,000 hectares of fruit that were hit by hail, but several factors that impact on business for the long term.

"Growers have insurance so they can get back the value of what they’ve lost, but the supply chain still gets affected, and to date we have exported around 40% fewer apples and pears overseas (outside Mercosur); it's not just about the loss of fruit but the loss of competitiveness," he tells

Izquierdo de Santiago says it is likely the combination of high European stocks and damaged fruit would mean more Argentine pome fruit would be destined for industrial processing. Satragni agrees in principle, but highlights this option isn't available at the moment.

"For the last 10 days there has been a strike with the national soda and juice union at a national level; that's not happening in the regions but it still affects the apple and pear growers."

Jorge Cervi, who is a director at exporter Mario Cervi e Hijos S.A., tells the issue is not just about damage to fruit either, with a lot of product rotten and unfit for industry, but damages to plants.

Cervi's company has apple and pear plantations in both the Rio Negro and Neuquén province, which means it has been able to diversify the weather risk with the latter only affected by hail over a surface area of 5%. However, regardless of weather there are many macroeconomic challenges facing the industry.

"Overseas exports have been reduced by around 25-30%, not just because of the lower supply but because Europe is in crisis.

"Prices are stable but the euro has reduced in value and in Argentina we have higher costs with inflation around 18%, so overall we have the worst combination of many factors."

The silver lining

Satragni says exports to the Mercosur trade bloc continue as normal, while Cervi is bullish about local markets too.

"For orchards that haven’t been hit the fruit is looking very good with less sun damage, which is particularly important for apples, and demand for apples is increasing in Mercosur; for us that's mainly in Argentina and Brazil and we’re getting better price than in Europe," says Cervi.

"Apples are of much better quality in terms of color and size, but the size depends on the zone, above all in Rio Negro where there is 12% less volume of red Galas."

"In quality, apples have one grade higher of brix, or sugar because of the humidity and rain, but the rest of the parameters of maturity have been maintained."

He says´pears too have shown good quality with attractive markets in Argentina and Brazil, as well as strong demand further afield in Colombia.

"Pears are also of good quality. Williams pears were picked early but with good ripeness and size; they’re not super big or small, they’re a good size.

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