Experts analyze biggest challenges facing Chile at Global Cherry Summit 2019

More News Top Stories
Experts analyze biggest challenges facing Chile at Global Cherry Summit 2019

During one of the sessions at last week's second annual Global Cherry Summit held in Chile, experts analyzed the most pressing challenging facing the industry in the South American country over the coming years.

According to figures presented by Claudio Vial, general manager of Ranco Cherries, Chile represents between 93 - 95% of cherries exported during the Southern Hemisphere season, shipping 180,572 metric tons (MT) in the recent campaign, followed by Australia with a little over 5,000MT.

There are slightly more than 30,000 hectares planted of cherries in Chile, according to a 2018 survey, but Vial said that this figure is believed to have approached 40,000 hectares by the end of last year.

However, he highlighted that only around 46% of the planted hectares has not yet entered into production, and when it does, production volumes will increase exponentially as the new orchards being planted are of higher densities.

"We want to understand a bit more about what will happen with this big challenge that we have that production will double in the industry in the next five years and we will maybe reach 100 million boxes in seven or eight years," he said.

He said that production volumes can be roughly calculated until around 2023, based on the number of older orchards that will be taken out and the newer ones that will come into production.

"We basically see that Satina, Lapins and Regina will increase significantly. We are assuming that the 8,000 hectares that will come into production - which are proportionally distributed among those varieties - we will arrive at a composition where we see that the three main varieties increase from 56% to 71% of the total volume," he said.

Faced with this, he said it was important to have sufficient processing capacity, putting emphasis on the number of processing lines that must be installed over the coming years and the level of investment the industry should be looking at.

Vial proposed that over the next five years, it would be necessary for exporters to invest between US$8 - 10 million for every 1% of market share they have.

Importance of logistics

Another important issue that was addressed during the session was the potential logistical challenges that will come with higher production. Francisco Labarca, executive director of Global Reefers, spoke about some of the key points to take into account to best manage the volumes that will be sent to Asia. 

He said that currently around 10,179 containers of cherries are being exported from Chile annually, and he forecast that number would double by the 2023-24 season. 

However, he clarified that those volumes would be spread out over a larger window and assured that with good organization all the volume could be moved without major problems.

"Chilean cherries, although they will double in volume, are a small part of what is transported in the world," he said.

He added that it would be important to distribute the shipments over more transport methods - potentially not just using the Cherry Express rapid shipping service, but also traditional journeys and also booting the volumes shipped via air freight.

Labarca expected that the number of containers exported via air freight would increase from 720 this past season to 1350 in 2023-24, to be sent over weeks 46 - 50.

Increasing port capacity will also be a key topic over the coming years, he added.

Main challenges

After the two presentations, a panel took to that stage that included Orieta Ramirez of Frusan, Marcos Echeñique of Copefrut, Cristian Tagle of Garcés Fruit, and was moderated by Manuel José Alcaíno of Decofrut.

One of the points mentioned by Alcaíno was the importance of air freight. On this, he questioned Labarca about the biggest challenges in this area, saying that although it doesn't move heavy volumes the transport method could help to solve some of the difficulties at the start of the season.

Labarca replied that a major challenge is the limited airport capacity to more heavier volumes efficiently, saying that use of another airport apart from Santiago would be necessary.

He added that it is important to consider the air sector within the season planning and not as a spur-of-the-moment action.

The labor shortage on the farm and in the packhouses was another challenge brought up by the panelists, as well as keeping the demand up amid rising volumes in order to achieve good prices.


Subscribe to our newsletter