Opinion: Twin challenges for Chile's table grape industry
By General Import Manager of EACHTAKE (CHINA) Limited Juan Pablo Zhang
Due to unexpected weather conditions, Chile's grape season harvest has been delayed by 10 days and even two weeks in some parts, including the central IV (Coquimbo), V (Valparaiso), Metropolitana, VI (O'Higgins) and VII (Maule) regions.
The unusually wet weather during the summer has held back Chile's seedless grape production in the central region. The production of Thompson seedless grapes has been compromised by quality concerns stemming from various bacteria. During rainy season, these could further aggravate damages during long-distance transportation.
As always, demand and supply are dynamically correlated. Reduced production of Thompson seedless, which were originally relatively tolerant to transportation loss, led to a significant increase in the returns of good quality Chilean white table grape exports to South Korea in January.
As for China's domestic market, Chilean Crimson Seedless grapes have been lacking traction. One explanation is that Chile's main competitor in this category, Australia, has an edge in not only geographical proximity to Asia but also production standards. In terms of grape color, sweetness and other features, there remains a gap between the Chilean Crimson and its Australian rival.
Admittedly, cherry production remains as Chile's forte, but there's still much room for improvement in the country's kiwifruit and seedless red grape production and processing. Traditionally, Chile's Crimson Seedless grapes have been exported to the U.S. market, but in recent years price slumps have occurred during peak arrival season in the U.S. - so it is no surprise that an increasing number of grape exporters have started shipping Crimson Seedless to Asia.
Red Globe is the most popular Chilean grape export to China. This year, it has met multiple challenges ranging from delays in the production season to the tapered export window. Lobesia botrana, also known as European Grapevine Moth, is yet another major cause for a reduced production of Red Globes in some areas. European Grapevine Moth originally came from large vineyards in Europe, which were slow in reacting to the outbreak, leading collateral damage in table grape farms nearby.
According to Chilean government's quality inspection protocol resolution N°4.287 de 2014 (Deroga Resolución N°6.853, de 2013) and the agreements signed by Chile's Agriculture and Livestock Service (SAG) with other countries, the export of grapes from affected regions must be called off immediately. Agricultural products from farms in these regions will be prohibited from exporting to major Asian countries such as China, Korea, Thailand and Taiwan.
The infested farms are required by SAG to manually take measures to contain the spread of the pest, with assistance provided by the authority. The government will hold back quarantine and inspection certificates for all infested farms, which means they are only allowed to export to the U.S., Western Europe, the Philippines and several other markets. As a matter of fact, Red Globe grapes are mostly consumed in the Chinese market, which offers the best FOB (freight on board) price. Overall, it is a huge blow to the local farms.
Fumigation is one way to exterminate the pest and secure grape quality. However, fumigation intervenes with the fruit's natural ripening environment and makes it impossible for long-distance travels to Asia (over 30 days by sea-freight). For this concern, it is in fact a rather unpractical way to solve the problem.
I have personally lived in Chile for over five years, and now I must give compliments to SAG's commitment to pest control. Even if one moth is found on a 2,000-hectare farm, all of the grapes produced on this farm are banned from exporting to China, Korea, Thailand and Taiwan, which require official quarantine and inspection permits. Surely it puts a damper on Chile's agricultural exports, but the SAG shows determination in its pest control efforts.
On a side note, if food security authorities in China could be as committed in enforcing relevant laws as their Chilean counterparts, the food safety situation would be so much better. This is also why many Chinese consumers go crazy for imported food.
At the moment, the European Grapevine Moth has spread from Region VI (a hub for Chilean vineyards) to Region V (major production center of Chilean grapes). The moth has been detected in several large grape farms. Vineyard owners are now in panic, fearing the loss of an opportunity to export their grapes to China this year.
On the other hand, China's domestic grapes are set to hit the shelves beginning in early June. Despite their relatively lower quality standards, Chinese grapes' competitive prices could pose a great challenge to imported grapes. Faced with dual challenges from delayed harvests and pest problems, it is expected that Chile's grape exports to China this year would see a significant drop. Numbers suggest by now there is already a noticeable decline, and as the pest further spreads in Chile, the overall grape export to China from Chile could see a even steep fall.
As much as we often talk about Chile as the ideal place for fruit production, given its preferable climate and geographic endowments, it is never easy to ensure the arrival of premium fruits at the doorstep of every single consumer around the world. Located on the southern tip of South America, Chile has supplied the Asian market with fresh fruits all year, even during off-season months.
It takes passion and commitment to stay in the fresh produce industry and advance further, because without tireless efforts in cultivation, packaging, supply chain management we would not have tasty fresh fruits at our dinner table. Remember, fresh fruits are not like genetically modified or frozen foods. Only the most committed player in the industry can offer all of us a stable supply of premium fruits at reasonable prices.