Chilean table grapes: Industry expects lower exports amid drought

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Chilean table grapes: Industry expects lower exports amid drought

The Chilean table grape industry has been taking steps to minimize the consequences of drought and ongoing social unrest in the country this season, amid expectations for a slight year-year-year decline in export volumes.

Official estimates released last week pegged exports for the 2019-20 season 1.6% lower, at 643,000 metric tons (MT) (equivalent to 78.5m boxes), according to a PMA report.

Traditional varieties such as Red Globe, Crimson and Thompson are expected to see some of the biggest declines, which are largely the result of drought and October frosts. At the regional level, the Valparaiso and O'Higgins regions are more affected than the Coquimbo and Atacama regions.

Ongoing drought causing uncertainty

To hear more about the season's expectations and diverse challenges, spoke with Andro Vidal, marketing manager of Chile-based Subsole, and Eric Coty, South Ameican import manager of Canada-based Oppy.

Drought remains one of the industry's main preoccupations, said Vidal, who commented that "there is a lot of uncertainty about whether or not the water we need will be available to us".

"The rivers are at a lower level than we expected," he said. "I think that there is going to be a decrease in volumes [industry-wide]. Today, [the drought] is a critical topic for us."

Meanwhile, Coty said: "Although there is some well-founded concern with drought this season, some growers have taken an especially creative approach to facing these issues, going so far as to buy and truck in water as needed.

"Naturally this means that sizing on grapes is likely to be smaller than usual in addition to a decrease in volume," he said.

One of Subsole's approaches to mitigate the threat of drought has been overseeing the most at-risk farms and identifying those with a lower potential to produce. Then, it chose not to plant in those areas. Thanks to this, Vidal expects Subsole's exports could rise by 5%.

This strategy made Subsole's table grape season in some regions begin a bit earlier than usual.

However, in the Copiapó Valley the harvest is generally running behind a typical year, partly as producers there are aiming to enter the market later to try and fetch better prices. 

Chilean social crisis

Another difficulty faced by the industry is the country's current state of social unrest. But in Oppy's case at least, Coty said that the company has been able to overcome the challenges.

"With an office in Santiago and so many friends in the grower community in Chile, our main concern of course is around the safety and well-being of our colleagues, growers and their families," he said.

"That said, there are always challenges in any market and the crisis in Chile poses significant logistical obstacles that have to be resolved. However, Oppy has a long history of working in Chile and our long-term approach provides us with a kind of resilience that enables us to weather these turbulent times."

Chile aims to keep up with changing market demands

Aside from the numerous challenges, a key trend taking place in the Chilean grape industry is the ongoing shift toward seedless varieties.

"Many of the traditional varieties of grapes, stone fruit, apples and pears continue to make up the majority of exportable volumes," Coty said.

"However, what we are seeing now is that retailers and consumers alike are demanding progressively better flavors, and growers in Chile are responding."

New varieties are increasing "exponentially" in terms of volume, he explained, adding that there is also good retail demand for Chilean produce during the year-end holidays.

"Cherries, blueberries, various table grape varieties and even some early peaches and nectarines will be able to meet this demand just in time," he said.

Current market conditions for Chilean table grape industry

Vidal explained that the strategic decision to delay the crop in the Copiapo Valley came in response to previous years when Chilean grapes entered the market during the same period as Peru. This resulted in tough competition and lower prices.

"Nowadays, there is a lot of diversity of fruit available in the market. For example, producers in Copiapó are harvesting at the same time as producers in Piura, Ica, South Africa, etc. Basically, there is a lot of fruit available 52 weeks a year and everyone is trying to find space," commented Vidal.

Vidal said that it is necessary for Chilean grapes to "work within the U.S. market because its consumers are very relevant to our country's industry".

Another important factor for the industry is to be able to differentiate itself from other markets. Vidal said that social responsibility and sustainability are key. Since consumers have increasingly demanded responsibly sourced grapes, in response, exporters work alongside producers to establish best practices.

Photo: Oppy 

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