Chilean bi-coloured apple exports to the EU market last season surged by 22 per cent to 4.9 million cases, and volumes this coming season are expected to match or exceed last year's numbers.

“It is obvious that everything in the EU has improved because of the euro exchange rate,” says Jonathan Bass, CEO at Dole Chile, Santiago. “The northern hemisphere, in general, has not produced great volumes of apples this season, so stocks will be down and Chilean exporters to Europe this coming season will be looking repeat last season's successes.”

Andrew Wallace, executive director at San Clemente SA, a Santiago-based apple exporter with strong ties to the EU market, echoes Bass's optimism, but with a small disclaimer: “We understand that the EU has had a difficult apple season this year because of their exceptionally hot summer weather, making us think that harvest will be down. This makes it likely that our company, and Chile in general, will be sending more apples there this season. Though nothing is ever entirely certain.

Because what is going on with our competitors is even more important than the apple stock situation in the EU. If apple harvests in South Africa and New Zealand are down, it could be great season for us in Europe. But if the harvests in those two countries are bountiful, everything could change.”

Rene Wunkhaus, export director at Copefrut, an important apple growing cooperative and exporter based in southern Chile, adds another caveat: “I can say with some certainty that Chile's the bi-coloured varieties will continue to do well in the EU market. But I just can't say the same with respect to our Reds. Will there be a market for them?”

Indeed, according to most industry leaders, Chile's abundant Red apple harvest has always proved to be a mixed blessing. According to recent market analysis by Decofrut, a Santiago-based fruit intelligence and service provider, Red varieties accounted for nearly a quarter of the 27.7m cases of apples Chile exported in 2002/2003 ñ some 7.7m cases.

“The problem in Chile is that we still have a lot of Red apple varieties, and we have been too slow in phasing in the bi-coloured varieties,” Wunkhaus explains. “Each year it is getting more and more difficult to sell the Red varieties. Southern Europe used to be a good market for our Reds, but consumers in Europe are changing, and now tend to prefer Royal Galas or Fujis.”

The Decofrut study also confirms that production of bi-coloured apples in Chile was up a sharp 18.8 per cent to 14m cases in 2002/2003, led by Royal Galas, which were up 17.7 per cent to 9m cases; Fujis, up 20.9 per cent to 2m cases; and Pink Lady, up 45.2 per cent to 1.1m cases. Braeburn volumes appear to have stabilised at 1.5m cases last season. Green apple exports, meanwhile, rose by 19 per cent to 6m cases.

By way of contrast, Red volumes grew a slight one per cent in 2002/2003. Still, their large numbers complicate Chile's apple deal dramatically because their market options are limited: Latin America, the Middle East and Southern Europe. The bi-coloured varieties, of course, are appreciated almost everywhere, especially in North America and Asia.

Consumer demand for Reds is falling in Europe, while the Middle East market is small compared to other alternatives. And Reds shipped to the Latin American market play a very risky game, end season game.

“Many of our Reds have traditionally gone to Latin American markets, like Venezuela and Colombia,” explains Wunkhaus. “But things have got so complicated in many of the Latin American markets that it is becoming a very risky deal. The Reds we send to Latin American countries tend to be sent at the very end of the season, after considerable storage time and after the competition from Argentine and Brazilian apples has slackened off. These markets can be very unstable, because of political problems, and when things are quiet, there is a risk of flooding the markets.”

Many Chilean leaders think the ultimate solution centres on decreasing Red production.

“I think that Chilean growers have to cut back more of their Red apple orchards, they must cut back Red production,” Wunkhaus says. “This has already been done to some extent, especially by the larger producers, who can cushion the change over to bi-colour varieties by relying on other fruit harvests. But the small Red producer has a tougher time making the switch ñ he hasn't got the funds to wait out the four or five years it takes for the new bi-coloured trees to start producing and generating an income. So it isn't that easy to tell them they have to convert, cut their trees, and the production continues. Some growers had the chance about five years ago to make the conversion ñ some converted and some didn't. So the solution is still escaping us.”